David Heath: The right hon. Gentleman takes an extraordinarily sanguine view of the fact that we are losing dairy farms at the rate of 40 a week; that we have lost a third of dairy farms since 2000; that dairy farmers on average earn less than £3 an hour for a 70-hour week. The fact is that farm-gate prices go down while supermarket margins go up. It is clear that the supermarket code of conduct is not adequate to the task of regulating the industry. Does he intend to take action or is he simply going to wait for the extinction of the British dairy farming industry?

Alun Michael: I was not sanguine: I simply gave the hon. Gentleman the facts. He seems extraordinarily pessimistic. The production of milk is at roughly the same level as it has been in recent years. There has not been a large drop in production, although he is right to say that some producers have gone out of dairy production—because they have taken business decisions to move elsewhere or because they have found it difficult to make a profit from milk. That is illustrated by the big difference in profitability between farmers. We want a sustainable and competitive industry. That must involve bringing up the efficiency and profitability of those at the lower end of the scale whom I have mentioned. That is being addressed both by the industry and by the Government. That is why my noble Friend Lord Whitty has put so much effort into working with the dairy supply chain forum, which has a clear focus on efficiency and profitability.

Alun Michael: The hon. Gentleman always lets us know when he is making a partisan point, and he is clearly not doing so on this issue. There is a danger of being over-optimistic or over-pessimistic on this issue. I said that there was an extraordinary variation between some farmers who are doing quite well and producing at a profit and others. I ask the hon. Gentleman to pay particular attention to the fact that I gave, that there was a difference of 12p a litre between the top and bottom quartiles of farmers' costs of production. That obviously makes a big difference to profitability.
	The supermarket code of conduct is being reviewed as a result of the work of the Curry commission and its report. The Office of Fair Trading initially concluded that there was some evidence of problems within the code, but that little hard evidence had come forward. It has therefore worked on a compliance audit. We all look forward with great interest to the findings of that proactive look at the way in which the supermarkets operate and their relationship with the farming industry.

Brian Wilson: Does my right hon. Friend agree that value-added products are one way of increasing the sector's profitability? Does he share my puzzlement that one can walk into a supermarket and see the shelves lined with value-added dairy products produced by vertically integrated co-operatives on the continent while such co-operatives in this country are deemed anti-competitive?

Alun Michael: The current farm-gate price is, I believe, 19.6p, so clearly producing milk in excess of that would not be profitable. In 2003, the KPMG report found that 60 per cent. of milk was produced profitably for farmers, which, as suggested by the large variations between the top and bottom quartiles, implies that for some people production is not profitable. I recommend that my hon. Friend chooses as his weekend reading the report by the Milk Development Council published in August 2004, as it demonstrates that, although the proportion of the price taken by the supermarkets has increased in the past 10 years, another 10 years ago the proportion that they took was roughly what it is now. One must therefore take a careful look at the matter, and that is precisely what my noble Friend Lord Whitty is doing with the forum that represents the farmers and the dairy industry, which we want to be sustainable in the long term.

Elliot Morley: The European Union pressed the Government to produce at a very early stage their draft proposals arising from our calculations relating to the emissions trading scheme. Those calculations have been refined by Department of Trade and Industry modelling. It was always made clear to the EU that our proposals were in draft, were not complete and would be amended. According to our legal advice, the EU is under an obligation to consider amendments, but it has refused to do so. That is why we have taken legal advice.

Elliot Morley: The recycling of computer equipment is important. Well-established organisations and companies take and recycle IT equipment. The hon. Gentleman's point concerns the cost of IT removal. Local authorities raise many issues with me, but that issue is new, and I do not know whether a local issue has occurred. I would not claim to be an IT expert, but I know that there are well-established methods of removing data from redundant equipment and storing it and backing it up in archives. Isle of Wight council may wish to take some technical advice on that.

Ben Bradshaw: Again, I agree with the hon. Gentleman. Game is extremely nutritious and tasty, and contains some of the vital oils that are shared with oily fish, which we know to be very good for one's health. The Government already give marketing help to the industry through various grants. We hope that one of the consequences of doing away with some of this archaic legislation—I have to say that that was not dealt with under the previous Conservative Government—will be a welcome boost to the shooting and game dealing industry, ending the ludicrous fact that game can be sold only for very limited periods of the year.

Margaret Beckett: I am afraid that I do not entirely share the hon. Gentleman's view. It is and always has been the Government's purpose to defend British interests as vigorously as we can, and we have a good track record of doing that. However, there is something to be said for the Commission's general approach. It is too early to predict the commissioner's further detailed proposals because, as hon. Members know, the Commission has understandably said that further sets of proposals are unlikely until the EU's appeal against the World Trade Organisation case has been heard.
	The Commission's existing proposals will have an impact on every member state. The independent review suggests that the likely scenarios would lead to reduced production of sugar beet here but that the impact would be significantly lessened if growers restructured and/or reduced their costs. A range of measures might mitigate the impact on the British industry. The hon. Gentleman can rest assured that we will do our utmost to achieve the best long-term outcome for the British industry.

Margaret Beckett: I am conscious of the fact that the right hon. Gentleman chairs the Select Committee on Environment, Food and Rural Affairs, which takes a similar view to that of the Government on the overall prospects for sugar reform and the need for such reform. I very much welcome that. On bioethanol, perhaps I did not express myself with as much clarity as I would have wished. I did not mean to suggest that there was a dispute over whether there was support for a bioethanol industry. That support exists and he will know that the Chancellor has already offered generous cuts in taxation to help to stimulate that market. It is now a matter of what further steps might be taken to stimulate production. Other matters, such as the availability of capital grants, are also being considered.

Margaret Beckett: Far be it from me, normally, to be terribly fair to Conservative Members, but on this occasion, I must admit that my hon. Friend is being uncharitable to them, because the Select Committee certainly supports a reform of the sugar regime, and, as far as I am aware, so do the Conservative Front Benchers. Certainly, there is now widespread acceptance across the House that we do not want the persistence of a regime that, as he rightly said, has encouraged dependency. We want an efficient and well-run single market in agriculture, as in other industries. In every part of the House, people are confident that British farmers are more than capable of holding their own in such a market.

Tim Loughton: Will the Minister therefore pay tribute to the two councils in my constituency, Adur and Worthing—both Conservative controlled—working in partnership and with West Sussex county council, which have been innovatory in improving recycling levels? They have returned to weekly blue box collections, which were slashed to fortnightly by the previous Liberal administration, supported innovative programmes such as the Alchemist store, which I shall reopen on a new and improved site tomorrow and which provides recycling facilities to local schoolchildren, and have now merged their waste disposal fleets and used joint depots to maximise efficiency gains for local council tax payers. If he will pay tribute to them, why does his Government reward my councils in Sussex with some of the meanest local government grant settlements anywhere in the country?

Elliot Morley: I have written to all local authorities to congratulate those of all parties who have performed well on waste collection and recycling, to encourage those who are not performing as well to do better and to offer the support available through the waste implementation programme and Waste and Resources Action Programme. I very much welcome the innovation of local councils, including his, and the example of joint procurement is exactly the kind of initiative that the Government want to encourage. On financing, this Government have made £1.3 billion available through core funding to local authorities over the spending review period, as well as about £275 million in additional funds through private finance initiative credits, which is a significant amount. Incidentally, that funding would be slashed to the bone were the Conservative party's James review ever implemented.

Margaret Beckett: The UK has a range of obligations under the Kyoto protocol, including reducing greenhouse gas emissions, adapting to the impacts of climate change and assisting developing countries in tackling climate change. We are making excellent progress on all of them, which includes our being well on track to meet our target of reducing greenhouse gas emissions by 12.5 per cent. by 2012.

Tony Lloyd: I pay tribute to my right hon. Friend's role in ensuring that we have done so well with the Kyoto objectives, but may I ask her specifically about our failure so far to make the same progress with carbon dioxide emissions? We are still some way from our domestic target of a 20 per cent. reduction by 2010. I know that it is both my right hon. Friend's and the Prime Minister's ambition to concentrate on that during our G8 presidency. Would it not give the Prime Minister great moral authority, and also make practical sense to British business and society, if we were to get ahead of the game in respect of greenhouse gases and, in particular, carbon dioxide? Would it not be sensible to introduce sectoral carbon budgets, so that industry and the country would know how we intended to achieve the 20 per cent. reduction? Everyone would be clear about what was expected of them and we would have something against which to measure our progress.

Sydney Chapman: I accept that the Government's declared target of reducing carbon dioxide emissions by 20 per cent. by 2010 goes beyond the Kyoto agreement. Will the Secretary of State confirm that in 2002–03 carbon dioxide emissions actually increased by 1.5 per cent.? Can she give last year's figure? Perhaps more important, when will she announce initiatives to get us back on track for the 20 per cent. reduction by 2010?

Margaret Beckett: It is very much a goal of the British Government's approach and policy to spread the message, which we believe to be true, that it is perfectly possible to cut emissions and to grow the economy. I am afraid that one reason for the success that the Conservatives claim in cutting emissions during their time in office is that they flattened the economy. This Government's achievement has been to grow our economy by a figure for 2002–03 of, I think, more than 30 per cent., while cutting emissions by 14 to 15 per cent., so we need no lectures from the Conservatives; and, of course, the overall level of greenhouse gas emissions is down from the level that we inherited from them.
	There is some misunderstanding about the emissions trading scheme. The position in the UK is not particularly different from that elsewhere in Europe. The scheme operates on precisely the same basis in most member states exactly because most have yet to sort out and finalise their allocations and although people cannot sell on the spot market, for example, they can participate in the forward market. My understanding is that virtually every member state is in more or less the same position. As my hon. Friend the Minister for the Environment and Agri-environment pointed out in answer to an earlier question, the Government submitted to the European Commission amended figures for the level of allocations in the emissions trading scheme precisely because the review and analysis of existing information suggested that our previous figures needed substantial adjustment. It was the Conservatives—and, indeed, players throughout British industry—who were demanding that we take account of British industry's representations concerning the claimed potential impact on competitiveness, so it is a bit rich for them now to complain about our having done so.

Norman Baker: Are the Government still absolutely committed to a 6 per cent. reduction in carbon emissions by 2050 and can the Secretary of State confirm that there is no question of watering it down or abandoning it? Can she also confirm that, during the British presidency of the EU and the G8, we will actively encourage other countries to adopt that target?

Margaret Beckett: There is certainly no question of the Government resiling from the long-term target that we set. During our G8 presidency, there will be several events through which we shall try to promote discussion about what happens in the longer term across the globe. My hon. Friend the Member for Mansfield (Mr. Meale) referred to the discussions that took place in Buenos Aires and, in the early part of February, we will host a scientific conference to consider the latest information and establish whether there could be more of an emerging consensus about the sort of targets that could achieve stability and avoid further dangerous impacts on climate change. In the middle of March, we will host a meeting of energy and environment Ministers from some 20 states, including those with particularly substantial and massively growing energy needs, such as China, India and Brazil. We are indeed using the opportunity of our G8 presidency to do what we can to promote more thoughtful discussion.
	I am sure that the hon. Gentleman would be among the first to acknowledge that, while it is absolutely right for the British Government to identify where we think—

Alun Michael: In the first instance, I point again to the Milk Development Council's report published in August, which has two extremely interesting tables. One shows the prices and margins over the last 10 years, while the second goes back 20 years and more. They demonstrate that the variations have increased the take from supermarkets in the last 10 years, but that the margins are closer if we go back over 20 years. These are complex issues.
	The hon. Gentleman should also bear it in mind that the production of milk remains, with some variations of a couple of per cent., at the level it was before the decision of some producers to go out of the market. As I said, it is a complex issue and in an earlier answer I underlined the great difference in profits that resulted from the efficiency of the top quartile of producers compared with the lowest quartile.

Ann Winterton: There are no more efficient dairy farmers than in Cheshire, especially in Congleton—[Interruption.]—and, perhaps, Macclesfield. Many of them have been forced out of milk production because of farm-gate prices and many more remain in production only because of the cheap labour of their families. If we want a living and working countryside, we have to ensure that dairy farmers remain profitable and that there is transparency in the figures produced by the processing and retailing sector. The 18p highlighted in the report of the Environment, Food and Rural Affairs Committee has to be accounted for.

Gordon Prentice: I wonder how that squares with the situation in Colne in my constituency where Macadam's garage has been illegally spraying cars for months. A woman came to see me and described how her front room smelled as though it contained 20 open tins of varnish. It has been like that for months, but the Liberal Democrat-controlled council seems powerless to act. Surely the powers are available to prevent people from allowing such harmful emissions into the air and to provide redress for the people who have been affected.

Peter Hain: On the Railways Bill and the Road Safety Bill, there was a difficult business management issue, as the hon. Gentleman knows. As he fairly acknowledges, he and I were anxious to hold the sitting hours debate on a day when the maximum number of Members would be present—whichever way they voted—so it was desirable to hold it in the middle of the week, and that is what we did by putting it on Wednesday 26 January. I am sure that we can get round those related transport matters both in Committee and on the Floor of the House in a practical fashion.
	I continue to note the hon. Gentleman's very fair request for debates on Africa and the middle east, and the Foreign Secretary is aware of it. As the hon. Gentleman knows, we are at a stage in the business cycle where we are getting through many Second Readings and making progress—more rapid progress than some of our critics might have imagined. The legislative programme is in very good shape indeed. There has not yet been an opportunity to hold those debates, but I continue to keep the matter under review.
	The hon. Gentleman is aware that the Constitutional Reform Bill currently being discussed by the usual channels. The Government will of course ensure that any programme motion provides for the matters in the Bill—which, yes, I described on 9 December as "a major constitutional measure"—to be debated on the Floor of the House. That has always been our intention. However, it is not the intention to deal with every aspect of the Bill on the Floor of the House, and adequate time for scrutiny in Standing Committee will be allocated. There are precedents for that, and the hon. Gentleman quoted some: the Greater London Authority Bill was one and the Political Parties, Elections and Referendums Bill was another. The Constitutional Reform Bill has 111 clauses, and the major constitutional measures will, properly, be taken on the Floor of the House, but for some of the other measures in a Bill over which there has been exhaustive consultation, and which has been exhaustively debated in the House of Lords, I am sure that the House will see it as reasonable that the Government adopt the approach that we have adopted—even if the hon. Gentleman does not.
	On the question about the trade deficit, I am surprised that the hon. Gentleman has not pointed to the fact that we now have the strongest economy in living memory, with unemployment at its lowest for 30 years, the lowest mortgage and inflation rates for 40 years and the longest and most sustained period of economic growth for 200 years, compared with Conservative policies, in government, of high interest rates, high inflation, two recessions and 3 million unemployed. I should have thought that the hon. Gentleman would want to keep quiet about the economy, as the Leader of the Opposition consistently does in his questions to the Prime Minister. The country knows that electing a Tory Government would place at risk the whole future of the economy, with rapidly increasing mortgages, cuts in public spending, rises in unemployment and rises in prices.
	On binge drinking, the hon. Gentleman knows that, in the end, it is for local authorities to determine what the licensing hours should be for individual premises or what the policy should be in a particular locality, and we have provided for that. The problem is that we have binge drinking now, so clearly the existing system is not working. We are trying to ensure that people do not have to pour out of licensed premises at exactly the same time, tanked up because they are desperate to get extra alcohol into themselves; unfortunately, too many of them do and they then create law and order problems for the police.

Peter Hain: The police have varied views on the scheme—not all of them oppose it, and many recognise that this is a sensible way to proceed. Why should the rights of the law-abiding majority to drink sensibly be transgressed? Surely their rights and liberties should be protected, which happens elsewhere in the European Union. Why should the rights of people who come out of the theatre and want the chance to enjoy a pint or a glass of wine be infringed and limited by an arbitrary cut-off that is imposed because of an abuse that is practised by a minority, bearing it in mind that, in any case, local authorities will have the right to control the matter locally?
	The hon. Gentleman asks about burglaries and reasonable force. As the Home Secretary said yesterday in a written ministerial statement—it has been repeated today—after an exhaustive review, the Association of Chief Police Officers and the Crown Prosecution Service, the two key bodies involved, agreed that the existing law allows plenty of scope for reasonable force to be exercised. Indeed, I am advised of cases in which householders have killed intruders, but have not been prosecuted because the existing law provides plenty of scope. Our message to householders is that they have the right to defend their homes and to use reasonable force, and that they are entitled to use reasonable force if they suffer a burglary of an aggressive character. We are putting that message forward and the existing legislation provides for that, as ACPO and the CPS have confirmed. There is thus no need to amend the legislation.

John Cryer: The Leader of the House will be aware of the Unison campaign to take hospital cleaning contracts back into the public sector, which has started partly, at least, because in the 20 years since the privatisation of cleaning, the number of hospital cleaners has halved. If it was up to me, I would renationalise the lot and take back everything that the Tories privatised, starting with the railways. However, the situation is crucial—it could be a matter of life and death. The introduction of the profit motive into hospital cleaning has been a complete failure, as it has in most areas. May we have an urgent debate on the matter?

Peter Hain: The Secretary of State for Health has made it clear that cleaning is a serious problem in too many hospitals, and he is tackling the matter. The situation is a legacy of the Tories' disastrous privatisation of cleaning when they failed to ensure adequate standards, which are now being pushed through by the Government's policies. My hon. Friend will understand that MRSA is a separate, though related, issue because that is to do with the mutation of disease, which is difficult to deal with. The Secretary of State is well aware that clean hospitals are a vital prerequisite for effective treatment.

Paul Tyler: Will the Leader of the House arrange for the Prime Minister to come to the House early next week to make a statement on the hunt for weapons of mass destruction? He will have noted that overnight the President's spokesperson at the White House said that the Iraq survey group will now officially stand down. The exercise has ended, which clearly demonstrates that the House was given a completely flawed prospectus for going to war in Iraq. We now know that WMD stands for either weapons of mass distraction, or weapons of mass deception. We clearly need a statement from the Prime Minister as early as possible.
	I think that the Leader of the House was in the Chamber a few minutes ago when hon. Members on both sides of the House were asking the Secretary of State for Environment, Food and Rural Affairs important questions about the Kyoto protocol and climate change. Will he arrange for an early debate on the subject? We know from the Secretary of State's replies a few minutes ago and from the Minister for the Environment and Agri-environment's answers to my question about the severe weather conditions and climate change yesterday that the Government are undertaking several initiatives in the near future—in February and, I think, in March—partly as a result of our current role as the lead country in the G8. Should not the House hear precisely what the Government have in mind to ensure that G8 countries live up to their expectations? Is the Leader of the House aware that there has been an important Lords report on this issue, to which I understand the Government have not yet responded, and a report from the Commons Select Committee on climate change and flooding, which asks for a White Paper? The Government apparently responded that there was no need for such a White Paper.
	Does the Leader of the House recognise that this is an extremely important issue for hon. Members throughout the House? If we do not take the opportunity of the G8 leadership to do something serious about it—notably to persuade the President of United States to take the matter seriously—the whole of the world will suffer.

Nigel Evans: May we have a debate on the availability of information in books or chatrooms that could assist people to commit suicide? In Preston in September, a 19-year-old lady had a book called "Final Exit" and visited chatrooms and then sadly committed suicide. The Lancashire Evening Post is running a campaign entitled "Stop Pedlars of Death". May we have a debate on what can be done to close down the sources of the information that vulnerable young people are getting?

Peter Hain: I am inclined to have a re-run the Second Reading of the Clean Neighbourhoods and Environment Bill, because there were only two Conservative speakers, compared with 18 Labour speakers. That demonstrates that the Conservatives are not interested in antisocial behaviour or clean neighbourhoods. They do not care about graffiti, fly-tipping, abandoned vehicles, noise pollution and other scourges of people's neighbourhoods. The Labour Government, however, are taking the matter forward, and we will continue to do so, even though we have to face up to the Opposition.

Andrew MacKinlay: May we have a debate on the need for a further Thames river crossing to the east, outside the borough of Thurrock, incorporating flood defences? I draw to my right hon. Friend's attention the fact that last weekend the M25 was blocked. That has an impact on us in Essex and north Kent but it also a serious impact on the entire UK economy. The Dartford-Thurrock crossing is not so much a tunnel as a funnel, and we need alternative crossings so that people can get to the channel ports and airports without suffering 24 or 48-hour closures.

Peter Hain: I very much agree that science has an important role to play, which is why we have greatly increased expenditure on science in Britain. He rightly identified the importance of detecting major disturbances, which is why the Prime Minister asked the chief scientific officer to look into the matter and report as quickly as possible. I understand from informal conversations that we have the potential and perhaps even the capability at present to monitor such things, so the question is how we can best enable the rest of the world to benefit from that.

Anne Campbell: May I congratulate my right hon. Friend on the excellent report by the Modernisation Committee on sitting hours and ask him about September sittings, of which I am a great supporter? I understand why there will not be any September sittings this year, but I urge him to introduce a proposal enabling questions to be submitted within a two-week period. That would mean that we would not have a long time from the summer recess until October when we are unable to table questions to Ministers.

Andrew Mitchell: Does the Leader of the House recall the Committee composed of senior Privy Councillors of all parties and from both Houses that reported on the Anti-terrorism, Crime and Security Act 2001 in a document published on 18 December 2003? It unanimously concluded that intercept evidence should be permissible in British courts. Does he further recall that the Government promised to respond to that proposal by early 2004? The White Paper on the Serious Organised Crime and Police Bill, "One Step Ahead", promised that their response on intercept evidence would be available to the House by June last year. During the course of the autumn, the then Home Secretary made it clear that the response on that important matter would be with the House by the end of last year.
	The Serious Organised Crime and Police Bill is now in Committee, and next Tuesday I hope to move an amendment on behalf of the Opposition to allow intercept evidence to be used in British courts. Does the Leader of the House understand how helpful it would be to the Committee and to the House if the Government were to produce their response on that important matter, which has been delayed for too long?

Peter Hain: My hon. Friend has made his point, but the matter is for the BBC. Many hon. Members would criticise me if I said that Ministers should determine the programme content of the BBC or any other major broadcaster.

Peter Hain: Since I do not know when the general election will be, I cannot possibly give such an assurance. However, our legislative programme is dynamic. We are making enormous progress on Second Reading, in Committee and even on remaining stages, and the animal welfare Bill is part of that process.

Richard Burden: May we have an early debate or perhaps a statement from the Chancellor on the child trust fund? I do not want to debate the merits of the fund, which are fairly clear—more than 1,000 children in my constituency are already scheduled to benefit. The matter that needs debating is the future of the fund in the perhaps unlikely event that a Government who are committed to billions of pounds of public expenditure cuts came to power. Could such a Government remove eligibility for the child trust fund not only from future parents and children, but from children who are already in receipt of it? We should consider that important matter of public policy in this House.

Peter Hain: A debate, perhaps on an Opposition motion and entitled "Baby Bond Stealers", would be very good. If I can find time, I may well be encouraged to arrange such a debate, because the issue is very serious. If the child trust fund were abolished, tens of thousands of youngsters would have had up to £500, and certainly £250, deposited by the taxpayer with the Government's organisation in a bond for life. If we are re-elected, when children reach the age of 17 we will double that deposit and allow relatives to contribute.

Martin Linton: Aged seven.

Peter Hain: Did I say 17? I meant seven. If a different Government came to power and sought to abolish that scheme, would they retrospectively steal that money? The Liberal Democrats in particular must answer that question, because they opposed the child trust fund. The Conservatives have not made their mind up yet, and they are accountable not only to babies, but to all the parents who have benefited from the policy.

Peter Hain: Honest differences of opinion are held on the war—I understand that. However, without wishing to repeat myself, this matter was the subject of a detailed statement by the Foreign Secretary last autumn, when he was asked detailed and challenging questions, and there has been nothing new. I think I am right in saying, though I stand to be corrected, that the Iraq survey group has not shut up shop and is doing other work, but there is no question but that it did not find any evidence of weapons of mass destruction—that is not in dispute, and the Government have accepted its conclusions.

Martin Smyth: We all welcome the response of the world and our own nation and people to the Indian ocean disaster. We have been warned, however, that we should not take our eye off the ball in relation to other ongoing tragedies. May I ask for a statement in the near future from the International Development Secretary on the situation in Montserrat? It is nearly 10 years since the earthquake tragedy there, and some people who were given temporary protective status in the United States have now been told that it will be lifted at the end of February because it is no longer temporary but will become permanent. What are we doing as a nation to deal with our own fellow citizens in Montserrat?

Graham Brady: The value-added league tables published today show very clearly not only that grammar schools have been more effective than comprehensive schools but that selective education systems, such as the one in my borough of Trafford, achieve better results than comprehensive systems across the country. May we have a statement from the Government setting out how they might change their policy in order to withdraw some of their discriminatory policies against grammar schools? In particular, can grammar schools be allowed to expand where they are successful and parents want it, in the same way as other schools can?

Peter Hain: As the hon. Gentleman knows, we have encouraged diversity. Indeed, specialist schools, although criticised when they were first proposed, have been hugely successful. What we see across the board under this Government is the record investment that is going into schools, with the recruitment of tens of thousands more teachers and classroom assistants, investment in IT equipment, and a steady rise in standards compared with the dismal record of Conservative Governments. I should have thought that that is the issue that the hon. Gentleman should focus on; it is certainly that on which the electors will decide when it comes to the general election.

John Bercow: May we please have a debate on Darfur, western Sudan? Given that the African Union force is clearly not preventing the mass murder of innocent civilians in Darfur, that violence now afflicts the internally displaced persons camps, and that the Janjaweed militias continue to run riot, does the right hon. Gentleman accept that a debate in Government time in the main Chamber would allow hon. Members to argue that the international community has a moral duty to act now, not through a monitoring force but the despatch of a substantial peacekeeping force, which will alone allow us to stop the slaughter there before it is too late?

Peter Hain: The hon. Gentleman is a more passionate spokesman on those matters than anyone else on the Conservative Benches and the House welcomes that. He makes an important series of points and the Government acknowledge them. We shall certainly bear them in mind and I shall ensure that both the Secretary of State for International Development and the Foreign Secretary are aware of the points that he raised today.

Mr. Speaker: That is a matter for the House after Second Reading, which takes place on Monday. I hope that that helps the hon. Gentleman.

David Clelland: I am grateful to my hon. Friend for giving way so early in his speech but those of us who are in Committee have to take what opportunities we can.
	Will it be possible during the Bill's passage to introduce provisions to give the Secretary of State the power to put a ceiling on interest rates? My hon. Friend knows that some constituents are unwittingly led into credit agreements with incurring interest rates and charges that can exceed 300 per cent. If such a provision cannot be included in the Bill, will he at least ensure that the measure provides for secondary legislation so that it could be introduced in future?

Gerry Sutcliffe: I understand my hon. Friend's problem with the Committee sittings this afternoon. I shall refer to ceilings on interest rates shortly but I give him the commitment that although we will not include such powers in the Bill, we shall keep the issue under review for reasons that I shall mention later. I am sure that my hon. Friend will get a copy of Hansard and I am happy to meet him to talk about the matter.
	We did not embark on reviewing and amending the consumer credit law lightly. The scope of the markets that we are considering is huge and the United Kingdom has one of the most highly developed credit markets in the world. We represent a quarter of the EU credit market generally and more than half of the EU credit card market. My right hon. Friend the Chancellor of the Exchequer said in his pre-Budget report last month that we had the best combination of low inflation, low unemployment and rising living standards for decades.
	With the achievement of that macroeconomic stability, to which the Government committed themselves, we have enjoyed interest rates at a level not experienced since the 1950s. I understand that the Monetary Policy Committee said today that the rates are to remain unchanged. Those rates have brought about improved access to affordable credit for consumers across the country, and the benefits of affordable credit are plain to see. When it is used effectively, a combination of sensible borrowing and saving enables consumers to enjoy the freedom that credit gives: freedom to improve their home, to take a holiday, or to buy the car that they need for work or family use.
	However, one in eight households still have arrears on either consumer credit or household bills, with all the strain on families, on health and on well-being that that level of debt can bring. Sometimes, it can be even worse. We have heard hon. Members tell the House about tragic suicides related to debt. I have no doubt that in all hon. Members' constituencies, there will be casework that shows the level of abuse by unscrupulous lenders who prey on the vulnerable, and on the poorly informed consumer. I know that there are such cases in mine. They highlight the real human misery that underlies the statistics on debt.
	More than half the households that are over-indebted have an income of less than £7,500 a year. I heard of one couple, both of whom suffered from mental illness, who were persuaded to take out a loan of £500. Within 12 months, the same lender had pressured them into taking out a further 10 loans, leaving them with a total debt of more than £5,000. That was 10 times the amount that they had originally agreed. The couple also owed another £19,000 to other lenders. Most importantly, they had no means to repay any of these loans. Thankfully, the couple were offered assistance by a local support organisation, and I am pleased to be able to tell the House that the debt was written off.
	No humane society can stand by and do nothing to prevent this sort of predatory lending. We certainly could not, and we are not going to. That is why this Government are committed to toughening the laws to combat rogue traders, unfair terms in contracts, and loan sharks who prey on the vulnerable and use despicable tactics to ensnare their victims. But this commitment cannot be fulfilled by new legislation alone. Building a credit market for the future means not only legislating for consumers but working with them.

Angela Eagle: I want to give a great welcome to the Bill. However, there is something rather odd in it that I want to ask my hon. Friend about, as he has been talking about extortionate credit. I want to ask him about the very unusual presence in the Bill of a maximum fine of £50,000 for those who are discovered dealing in extortionate credit, in contravention of the terms of their licence. It is very unusual to see such a maximum set down in a Bill rather than in secondary legislation. Will my hon. Friend consider this matter very carefully? It has been 30 years since the Consumer Credit Act 1974 was put on the statute book, and it seems wholly inappropriate to fix in the Bill a fine for this despicable behaviour of which many of us, on the Labour Benches at least, have had direct experience through people visiting our constituency surgeries. These people have been viciously exploited by the sellers of extortionate credit.

Malcolm Bruce: Following up on that point, is there not a further concern that many people take up these offers without making the calculation as to whether a credit card—as opposed to a bank loan or some other mechanism—is the appropriate means of raising the funds that they need? Should there not be an obligation on credit providers to advise people that other, cheaper options exist, instead of simply soliciting their custom without giving them any advice or warning them that they might have to pay a much higher interest charge than they need to?

Gerry Sutcliffe: That goes to the heart of the issues of clarity, transparency and people making sure that they know what they are letting themselves in for. While the argument is about responsible lending, it is also about responsible borrowing, not just for the short term but the lifetime of agreements.

James Plaskitt: My hon. Friend has just mentioned forthcoming changes in the banking code. Does he accept, however, that the changes envisaged in that code in relation to credit card cheques will not deal with the unsolicited issuing of those cheques? The White Paper, which his Department produced last year, cites as an example of irresponsible lending the unsolicited issuing of credit card cheques, yet I cannot find any measure in the Bill to deal with that.

Sally Keeble: I want to take my hon. Friend back to what he said about DTI funding for financial support and advice. In Northampton, our CAB's money advice work was paid for by lottery funding, which has come to end, so nobody is doing that work now. Funding for such incredibly welcome and important work needs to be enshrined in statute because people need to be able to exercise their right to seek such advice. Will the DTI therefore consider whether there is a proper national spread of available financial advice?

Andrew Selous: I want to return briefly to the issue of credit card cheques. Will the Minister at least consider placing a requirement on credit card companies to make it absolutely clear, in bold letters, that the moment that those cheques are presented, they cost the customer interest? I regard myself as a person of average financial sophistication, and yet I have fallen foul of that practice.

Gerry Sutcliffe: The time order is an interesting, useful tool on which we need to do a great deal of work, for which the Bill provides. I will consider the various representations from the CAB in Scotland and elsewhere on how we can make the time orders most effective. I shall now try to make some progress with my speech.
	We can see from the interventions by Members from across the House how important this Bill is to our constituents and to the credit industry. We were careful to consult at every stage. We could not have reached today's position without the continued support of all stakeholders: business, consumer groups and regulators. I thank all those who helped to get this legislation right.
	Important thought it is, the Consumer Credit Bill is not the whole picture. The Bill builds on the success of the consumer credit White Paper that we published a year ago. We have been doing considerable work with other organisations on many fronts. We have produced new regulations for credit advertisements, enabling consumers to shop around with confidence and to choose the best credit product to suit their needs. We have increased transparency across the sector by legislating for consumers to receive information before they sign up to an agreement. We have standardised the way in which APRs are calculated, so that consumers can compare the costs of credit deals with confidence. We know that many people found that a confusing issue—it was an issue to which the Treasury Committee devoted a lot of time, and we are also addressing it.
	We have ensured that consumers are given clear, upfront information in the agreements themselves, in print which people do not need a microscope to read. We have introduced a fairer deal for consumers who want to settle their loans early. We have brought forward new rules enabling consumers to conclude agreements electronically, increasing financial inclusion across the sector. We have worked with colleagues in other Departments to provide regulations that ensure that consumers are protected when signing agreements away from business premises.
	The Bill is therefore just part of our vision to provide protection for consumers in a fair, clear and competitive credit market. The Bill has three main themes: improving rights and redress; improving the regulation of consumer credit businesses; and ensuring appropriate regulation.
	The current tools available to consumers for obtaining redress or solving credit disputes are, at best, limited. Where there is a dispute, consumers are often restricted to court action—a costly and time-consuming process. Where consumers are trapped in unfair agreements or subject to unfair behaviour, the current rules do not provide for adequate redress. I am sure that all Members are well aware of recent high-profile examples, such as the judgment last month in the case of London North Securities and Meadows, in which an original loan of £5,000 soared to a debt of £384,000. Last month, the judge ruled that the agreement was unenforceable, partly because its terms were extortionate and failed to state correctly the terms of the loan. I am aware that the lender has appealed, and we await the outcome.

Graham Allen: I congratulate my hon. Friend on introducing this long overdue measure, and colleagues in all parts of the House on ensuring that the measure was brought before the House today and not delayed. If the Bill is passed, extortionate rates of interest could no longer be levied on future loans, but schedule 3 also includes a welcome provision for those of us whose constituents currently have problems, to ensure that the courts can reconsider existing agreements during the transitional period. Constituents such as mine, Mr. Frederick Jones, of whom the Minister is well aware, need that redress. Will he be open in Committee to the idea of ensuring that that transitional period is brought forward, so that my constituents, and those of many other Members in all parts of the House, can get that redress early rather than having to wait at least two years?

Gerry Sutcliffe: I thank my hon. Friend for his compliments on the work carried out, but, as I said, that work has been done by major stakeholders across the range. We are able to examine the possibility of retrospection because lenders themselves realise that their position and reputations are put in jeopardy when such cases come to the fore. I am sure that in Committee we can consider the detail of how best to use that provision to benefit consumers.

Gerry Sutcliffe: If the hon. Gentleman reads the Bill carefully, he will see that there is such provision in the form of the unfair credit test and the alternative dispute resolution procedure. We are improving the position, although if we find during the Bill's progress that further improvements are possible, we shall consider them. I believe the reason so few cases are brought is the high hurdle presented by the extortionate credit test. Lowering it by introducing an unfair credit test will improve things. I have already mentioned penalties, and the effect on the reputations of companies that do not act responsibly and fairly. The Bill gives the Office of Fair Trading powers to review the lifetime of licences that are approved.
	As Members have pointed out, the Meadows case represents a rare success for the consumer. Consumers should have the right to challenge unfairness where it exists, and obtain redress when that is appropriate. The Bill, as I said, introduces a mandatory alternative dispute resolution system giving consumers a fast and effective procedure, without the need to resort to court action immediately. It will be run by the Financial Ombudsman Service, which is experienced in dealing with disputes of this kind, and it will provide an impartial ruling in any circumstances in which a lender's internal complaints procedure has been exhausted. Consumers will be able to challenge unfair agreements more effectively, and competition will be increased throughout the sector.
	As I also said, the Bill will replace the out-of-date extortionate credit test with a new test based on the principle of unfairness. That will enable consumers to exercise rights that have previously been out of their reach. Consumers will be able to apply to the courts to reopen agreements involving an unfair credit relationship. The system will require consideration of all aspects of a transaction, including the lender's conduct in administering the loan. It will also give the courts a wider discretion to assist those who are unfairly treated by lenders.
	Provisions on unfair relationships will act as an incentive for lenders who might exploit consumers to behave fairly, which will result in increased and effective competition throughout the market. Consumers will be empowered to challenge unfairness where it exists, and obtain redress when that is appropriate.
	Empowering consumers by increasing their ability to challenge unfair agreements is our first aim, but consumers must also be confident that they are borrowing money from responsible lenders. Our second aim, therefore, is to improve the regulation of consumer credit businesses. The amount of work currently involved in licence renewal, together with the OFT's limited information-gathering powers and the lack of intermediate sanctions, hampers the OFT in both its running of the licensing regime and its policing of licence holders. The Bill will give it more powers, enabling it to obtain the information that it needs to ascertain and monitor the fitness of firms.
	Overhauling the licensing regime will create more categories of licence, and will introduce indefinite standard licences, together with an improved fitness test based on the credit competence of licensees. The result will be a more streamlined, more targeted system that is more appropriate for the modern credit market.
	Reducing the burden of bureaucracy on both industry and the OFT will also ensure that lenders acting unfairly are prevented from continuing and, if necessary, excluded from the market, that responsible lenders can be regulated by light-touch regulation, and that consumers can have confidence in a competitive market.

David Drew: My hon. Friend is being very generous with his time.
	I know that cold calling per se is illegal, but the excellent "debt on your doorstep" campaign—no doubt my hon. Friend has engaged in plenty of consultation with its members—has brought to our attention the way in which sellers use shopping vouchers and go on to estates, especially at Christmas, trying to induce people to buy without clarifying their rights. Could that practice be dealt with more effectively?

Gerry Sutcliffe: That is not covered by the Bill, but as consumer Minister I am looking into doorstep selling. The OFT has produced a report on which we have consulted, and we will make recommendations in the near future on the whole issue of cold calling. My hon. Friend may know that the Competition Commission is examining the home credit market following a referral by the OFT. A great deal of work is being done to ensure that consumers are protected.
	Consumers often suffer because of lack of information during the lifetime of a loan. Under the current regime they are often surprised by arrears or default fees, or are not told when they are behind with payments. The Bill will make lenders tell consumers when they default and when they are charged.

Gerry Sutcliffe: We think that the balance is right in the Bill. It will deal with burdens on business, and ensure that products that should remain in the marketplace are retained there.
	Keeping consumers informed is an essential part of being a responsible lender. Consumers must know exactly what their debt is. The more informed consumers are, the more aware they will be of whether a product is appropriate for them. Improving the standard of regulation, however, will be of no use if regulation does not do the job for which it was designed. The Bill's third aim is to ensure that regulation is appropriate and measured, ensuring comprehensive protection for consumers while allowing industry the flexibility to innovate.
	The Bill does ensure comprehensive protection, extending the protections in the 1974 Act to all consumer borrowing by removing the £25,000 financial limit above which consumer borrowing is not currently protected. It is appropriate and measured, maintaining the protections for business lending under £25,000. It allows industry the flexibility to innovate with an exemption for high net worth borrowers, enabling them to opt out of regulation. But lenders must also be confident that they are operating on a level playing field. The Bill makes the provisions in section 127 of the Act on the enforceability of defective agreements more proportionate. The remedy reflects the detriment.
	Passing discretion to the courts will not remove consumer protection, because agreements can still be found unenforceable, but it will increase fairness across the sector and allow lenders to compete on the basis of best practice.
	During our extensive consultations, we considered many other proposals. I am aware of campaigns to introduce an interest rate ceiling, which my hon. Friend the Member for Tyne Bridge (Mr. Clelland) mentioned earlier. The Government commissioned research on international practices, and decided not to introduce a ceiling in the UK credit market at this stage. We are not convinced that such ceilings help the consumers whom they are intended to protect. I stand by that decision, but as I told my hon. Friend, we are committed to keeping the matter under review.

John Battle: I am grateful to my hon. Friend, who has allowed many interventions. I join those who have given the Bill a warm welcome. I am particularly pleased about what it will do not just for those with credit cards, but for those in the sub-prime lending market—the poorest of the poor who pay the most.
	Having campaigned for the Bill, should the Minister not include in it a power enabling him to act on the basis of his review of whether a cap on interest rates and charges is necessary? If he leaves that open, we may have to wait another 30 years for more primary legislation to get to grips with the issue.

Gerry Sutcliffe: I congratulate my hon. Friend on his work in the all-party poverty group and on behalf of the "debt on your doorstep" campaign. I know that we disagree about interest-rate ceilings, although I will keep the matter under review. I do not think that taking powers through the Bill will help at this stage, but I am happy to discuss what might be done. I hope that it will not be 30 years before the Bill is reviewed, because the issues affect our constituents. We must ensure that people are treated fairly.

Gerry Sutcliffe: On interest rate ceilings, which we can discuss in more detail in Committee, difficulties can arise in terms of what is included in the annual percentage rate. Hidden charges for late payment, for example, can be left out and the situation can become unclear. We will doubtless discuss the detail of the pros and cons of interest rate ceilings in Committee, but I acknowledge the work of credit unions. Part of the difficulty for some credit unions in trying to get people to save has been that they are unable to get access to credit for 12 weeks. We have looked at using the social fund and the new financial inclusion fund to assist credit unions in their efforts to help those who need early access to credit.
	The Bill will empower consumers and encourage fair standards throughout the industry, and it drives forward an agenda based on responsible lending and responsible borrowing. It equips the UK credit sector to continue to lead in its field not only in Europe, but across the rest of the world, and it sends the direct message to the industry that for those who act dishonestly or unfairly, there is nowhere to hide. Our loan shark pilots are a prime example of this. But responsibility cuts both ways. Consumers have a responsibility to take control of their finances, to use credit sensibly, and to seek support and advice at the earliest opportunity when it is needed. Industry has a responsibility to provide consumers with the information that they need; to ensure that when it lends, it lends responsibly; and to make sure that support is available when customers get into difficulties.
	We said that we wanted to improve rights and redress for consumers; the Consumer Credit Bill will provide for this. We said that we wanted to improve the regulation of consumer credit businesses; the Consumer Credit Bill will achieve this. We said that we wanted to ensure appropriate regulation across the market; the Consumer Credit Bill will secure this. It has been broadly welcomed and I commend it to the House.

Angela Eagle: All Members will join the hon. Gentleman in paying tribute to the great work that CABs do. In its briefing to Members for Second Reading, NACAB says that the £50,000 limit on fines for those who contradict the terms of their licence and deal in unfair or extortionate credit agreements ought to go. As the hon. Gentleman has spent the past few minutes praising CABs, and in the light of their expertise and experience, does he agrees with that assessment that the £50,000 limit ought not to be included in the Bill, and should go?

Stephen O'Brien: I am grateful to the hon. Lady for raising that point. I heard her previous intervention on the Minister, and she raises a fair question about putting the ceiling in the Bill. It is not unprecedented, but it is not common. We all work closely with the CAB in our surgeries and have a great deal of respect for it, particularly on debt issues. My hon. Friend the Member for Tewkesbury (Mr. Robertson) will be leading for us in Committee, and I am sure that he will deal with that matter and explore it in greater detail.
	The challenge for policy makers is to ensure that consumers are, in the words of Baroness Wilcox, "in control" of the credit they take. Consumer choice is rightly a fundamental principle of a free market economy and consumers must be able to exercise their choice responsibly on the basis of full information that will apply for the life of the contract, not just at the time of the initial transaction. That is particularly the case for people on relatively low incomes. If their choices and obligations are not made easier to understand, they will continue to suffer the increasing financial exclusion that has escalated during the last seven years. It happens that, under a Labour Government, the gap between rich and poor has significantly widened.
	Like the citizens advice bureaux and the National Consumer Council, the official Opposition welcome in principle the Bill's aims of cracking down on loan sharks and unscrupulous vendors, helping consumers challenge unfair credit agreements, and making credit agreements more transparent and understandable. We must bear in mind that the vast majority of consumers handle credit sensibly, and for them the credit market is an important aspect of managing their affairs. Those on low incomes tend to be more vulnerable to the vicissitudes of financial fortune, and I pay tribute to the many Church organisations, charities, local government organisations and other groups, as well as the CAB, for the important work that they do on behalf of people on low incomes in their communities. It is vital unrelenting work of almost immeasurable worth to society as a whole, let alone to the individuals and families concerned. A prime example is the Royal United Kingdom Beneficent Association.
	When we legislate, we must be careful not to confuse the fact of debt with the cause of debt, and we should not lose sight of the growing evidence that the primary cause of debt is often linked to the heinous practice of over-aggressive marketing, particularly to low-income people. I have to say that that applies in particular to doorstep selling, although I recognise the slight distinction that we have to make when it comes to doorstep selling and the campaign focused on it. That activity is not always carried out by those traditionally labelled the pariahs of society—loan sharks. Over-aggressive marketing is carried out by others, too, but the Bill is strangely silent on that serious aspect of the problem. I hope that the Minister will take the opportunity to explain the Government's thinking on what appears to be a glaring omission from the Bill.
	I now turn to the action against what are known as rip-off practices. The duty of lenders to treat customers fairly in today's consumer credit market is a particular feature of the proposed legislation. The present extortionate credit test is 30 years old. In that time, the test has produced only 10 successful cases. It is clear that the difference between the original loan amount and the amount demanded back by creditors established as extortionate by the original Act is failing to prevent enough undesirable exploitative credit arrangements. It needs revision.
	We support the principle of clauses 19 to 22, which give the courts new powers to make judgments about unfair credit agreements, moving the focus away from credit agreements to the overall way in which the lender deals with the customer. However, concern remains about the details of the legislation. The CBI and others believe that the burden of proof that it places on traders, so that every creditor-debtor relationship is unfair until proved to the contrary, is extreme.

Stephen O'Brien: I am grateful to the hon. Gentleman. It is an interesting idea to have powers in a Bill to act as a deterrent against their ever being used—and from time to time, that is how it works out in practice. I accept that point.
	It is not my position to make the Government's argument, but the Bill contains an unfairness test. As I understand the right hon. Gentleman's argument, he wants a new policy approach after all the research that the DTI has commissioned, especially on international best practice, has been gathered. I would insist that any new policy approach should be in the form of primary legislation. Otherwise it would exist only as a threat, rather than something that we could properly consider and scrutinise, as is the duty of this House.

Stephen O'Brien: I, too, have some experience of the financial services ombudsman on behalf of my constituents, and the response has often been very helpful. The CBI must answer for its own evidence, but it is my job on Second Reading to ensure that the concerns that have been expressed by all interested parties are given a proper airing. I do not have an answer to the hon. Lady's question, but the financial services ombudsman himself has said, in an interview on the "Money Box" programme, that he had real concerns about his office's capacity to cope with the volume of work. The Bill would inevitably add to that volume, not least because those involved in smaller transactions are just as concerned as those involved in larger transactions, but the unit cost to the FOS will be disproportionately higher. We must at least consider whether we have the capacity to deliver the intent in the Bill. The hon. Lady asks a fair question. I do not have the answer, but it is now at least on the record.
	The CBI added that
	"consultation on these matters was promised, but has not been forthcoming".
	The Minister said that there had been a lot of consultation. I was certainly aware of that, but the Government also claimed that they had consulted on the proposal to scrap community health councils. My campaign four years ago proved otherwise. The Prime Minister had to write me a three-letter page of apology on that point. We had a decent campaign, but the councils were still axed—and something very much poorer was put in their place. Let me point out to the Minister that the CBI feels that it has not been consulted on these matters. We will naturally seek answers to these points in Committee, and we have already signalled that we will not vote against Second Reading.
	Let me deal with the reaction of business to the Bill. We should not forget that all transactions have two sides. Members on both sides of the House have expressed their concern for people on low incomes and other vulnerable people. That is right and proper as part of the job we do on behalf of our constituents. However, that would not be an issue if there were not another party to every transaction. In broad terms, British business welcomes the Bill, but like us it has asked where the details are. I listened with interest to the exchanges about unsolicited credit card cheques with the hon. Member for Warwick and Leamington (Mr. Plaskitt) and my hon. Friend the Member for South-West Bedfordshire (Andrew Selous), and I hope that that important issue will be explored in Committee.
	Rogue traders are a menace to business, as well as to individual consumers. As the Federation of Small Businesses correctly observed,
	"small businesses need similar protection afforded to consumers as entrepreneurs often use their house for security and lack specialist financial knowledge".
	The British Chambers of Commerce commented that they
	"generally support measures to tackle unfair practices in the consumer credit market".
	The CBI
	"supports in general the principle of the approach in the Bill to provide greater transparency in consumer credit transactions and the ability to target those traders who deliberately set out to deceive consumers".
	It is most unfortunate that the Liberal Democrat spokesman—the only member of his party to attend the debate—has disappeared, as I am about to tackle the Liberal Democrats' irresponsibility about the whole matter. They will have to read my comments in Hansard. We may take business's general approval of the Bill as complete disproof of the Liberal Democrats' simplistic and erroneous belief in the permanent struggle of interest between business and the consumer. I trust that the Minister will not have to suffer the same extraordinary diatribe against the high street banks from the Lib Dem spokesman—wherever he may be—that characterised his party's reaction to the Queen's Speech, issued to the Times Online, on 23 November 2004. If the Minister responds to that, the Lib Dem spokesman will be surprised, as he will not have a clue about the question that is being answered, but we shall welcome him back when he returns.
	There is, however, justified concern about some of the specifics of the Bill. The first is the lack of clarity throughout the draft legislation, with, consequently, an over-reliance on secondary implementing legislation that is not, as everyone in the House must admit, subject to the same degree of parliamentary scrutiny. As I mentioned, the Bill sets out three sources of protection for consumers facing unfair practices: the unfair credit jurisdiction of the court, in clauses 19 to 22; the consumer credit jurisdiction given to the financial services ombudsman, in clauses 59 to 61 and schedule 2; and the guidance issued by the Office of Fair Trading mentioned in clauses 19, 30 and 41.
	How will those different jurisdictions work together as a coherent system of consumer protection? Is the OFT guidance on the fitness of consumer credit companies for a licence sufficient? Will it leave businesses feeling informed and prepared, when the primary legislation states only—[Interruption.] Oh, the Liberal Democrat has returned; it is good to welcome him back.
	Clause 30 states only that:
	"The OFT shall prepare and publish guidance in relation to how it determines, or how it proposes to determine, whether persons are fit persons".
	Will the guidance, even in draft, be available before the Bill goes into Committee? That will be crucial if we are to give the measure proper scrutiny.
	What about clause 62, which gives the OFT powers
	"to monitor, as it sees fit"
	businesses being carried on without a licence? According to the draft regulatory impact assessment—people such as me really do read those things—the estimated administration costs associated with the measures are £4.9 million a year. How can the estimate be so precise when the phraseology of the legislation is so vague?
	The ambition of the legislation is justified, but the some of the drafting leaves much to be desired. As one interested party told me, the Bill is so vague that it is "not fit for purpose", with Ministers ducking their responsibility to propose the remit of the OFT, which Parliament should be setting rather than offloading it all on the OFT. There is a suspicion—I say no more than that—that Ministers are trying to avoid blame when the inevitable unintended consequences flow from a Bill in such an inadequately drafted state and/or that the Bill was drafted quickly so that it could be proposed today, to catch a passing headline in the run-up to a general election. However, we know how long the Bill's gestation has been, so I give the Minister some credit when I suggest that that may not be the answer.

Gerry Sutcliffe: I wanted to intervene on several of the hon. Gentleman's points, but resisted as I shall have a second bite at the cherry during the winding up. However, the time scale of the Bill is not about cheap, headline grabbing; the issue affects many people in terms of poverty and financial exclusion. All parties welcomed the White Paper and the regulations that resulted from it. There were no votes against any of the relevant statutory instruments. The reason that the Bill has taken so long is that it is important that all stakeholders—the industry, consumer groups and the voluntary sector—move forward together. That is why so much time has been taken, but I shall answer many of the points that the hon. Gentleman has raised when I wind up the debate.

Stephen O'Brien: I am grateful to the Minister. The points about the length of time the Bill has taken to prepare were put to me by the interested parties we consulted before Second Reading, and I hope that I couched them in terms that suggested that the latter allegation was unfounded. Yet again, there is broad consensus at the Dispatch Box.
	To avoid the practice of Ministers and officials relying on secondary legislation to implement costly measures briefly and vaguely alluded to in primary legislation, I ask the Minister to take note of one of the actions recommended in the Conservative party's latest policy document on business deregulation—it is one of which I am particularly proud, because I was responsible for it. We recommend conducting secondary regulatory impact assessments
	"whenever the substance of an important regulatory initiative would be provided by the exercise of secondary powers by Ministers or agencies".
	Interestingly, that is not currently a power, so I invite the Government to adopt our policy—in any case one of the Labour party's favourite pastimes, in words if not in action—as it would be so desirable in this case.
	The Opposition's priority is always to ensure that any new regulation on British business, if it is judged necessary at all, is proportionate, and that we have the appropriate means properly to measure its proportionality. Over-zealous regulation of the consumer credit industry would result in the consumer ultimately suffering a lack of choice, accessibility and affordability, as creditors withdrew products and the market shrank. We share the CBI's concern that
	"many of the significant policy areas have been left to . . . guidance from the OFT".
	A regulator does not have the same accountability to Ministers, and through them the electorate, as a Department of State such as the DTI. A recent academic study found that the budgets of the main Government regulators have tripled since 1997, and the headcount has more than doubled. The Government's own quango, the Better Regulation Task Force, recently complained that there are now so many regulators that it is impossible to establish precisely how many there are. That was confirmed by the response to a parliamentary question that I received on 8 July 2004 from the current Minister for Trade and Investment, when he was in the Cabinet Office. It is an incompetent and unaccountable way to govern.
	Given the significant new enforcement and law-making powers that the Bill awards to the OFT, it seems sensible, as the Consumer Credit Association suggests, to place a similar legal requirement on the OFT as currently applies to the FSA: that the regulator should take into account the need for proportionality, and the need to promote innovation and maintenance of the UK's competitive position. That is especially relevant since, according to the World Economic Forum, under Labour, the UK has fallen from the fourth to the 11th most competitive economy in world rankings.
	Another major complaint from a range of interested parties is about the timing of the legislation. Interested parties could now consult Hansard to read the Minister's opening remarks; in the light of what he said, I need not develop the comments that I had prepared for Second Reading. As the Trading Standards Institute has noted with some concern, however, there is not much "room for error" in getting the Bill on the statute books before a general election, if it is right, as we learn from The Sun, that the Prime Minister has scheduled one for 5 May.
	The Prime Minister described the Consumer Credit Bill as an important piece of legislation—like his Chancellor, let us not go down the track of whose word we can believe these days—yet despite those assurances, the Secretary of State for Trade and Industry is not in the Chamber. We hoped that the Bill could have been introduced earlier, although I accept that the Minister has been working hard to build consensus. There is an absence of the detail that would have helped us to scrutinise it, which is surprising given the length of time that the Bill was in preparation.
	In September 2003, the DTI published a research study, which found that 80 per cent. of people would welcome more information on their rights on consumer credit; 56 per cent. of respondents deemed the language used on credit agreement forms hard to understand; and an overwhelming 84 per cent. believed that consumer loans should be subject to the same regulations regardless of size—in other words, that the £25,000 threshold should be removed.

Stephen O'Brien: I am pleased that the hon. Gentleman asked that question, as I take a close interest in that matter and shall deal with it almost immediately. Financial literacy education, as against numeracy, is vital not only as a safeguard against debt but also for the competitiveness, enterprise and the entrepreneurial culture of our country.
	Why was the Bill not included in the 2003 Queen's speech? There is real concern that the savings ratio has fallen by nearly half since 1997, and now compares unfavourably with those of other advanced countries. While our savings ratio is 5.5 per cent., according to the OECD the EU average is 12 per cent. The Chancellor has seen it fit to take £5 billion a year out of pension funds, supported by Parliament with its Labour majority. Labour's first Minister with responsibility for social security, the right hon. Member for Birkenhead (Mr. Field), said:
	"when Labour came to power we had one of the strongest pension provisions in Europe and now probably we have some of the weakest."
	As my right hon. Friend the shadow Chancellor has noted:
	"It took six hundred years of banking history for household debt to reach half a trillion pounds. Now, under seven years of Labour, this has doubled."

Stephen O'Brien: I am happy to acknowledge the balance of the asset calculation, but that does not relate to cash. Savings are what matter, so I was making my arguments in the context of the savings ratio that has suffered such a dire collapse. That is especially important when we consider its relationship with debt.
	According to the Bank of England, consumer credit is running at about £1.5 billion a month. Borrowing increases by 15 per cent. every year and the average house borrows 140 per cent. more than its combined income. The Bank of England goes on to state:
	"This is above the levels in the US and most large EU countries  . . . The continuing rapid build up of debt by many borrowers may be building up vulnerabilities for the long term."
	The Conservative party takes the issue of consumer debt seriously because unmanageable debt robs people of their security in the future and their independence from the state. That explains why we have set up a commission chaired by Lord Griffiths of Fforestfach to investigate all aspects of household debt. On Tuesday, the shadow Chancellor published six options to restore the savings culture, which is essential if people are to have security for the future and independence from the state.
	We shall support the Bill, so it will not be us who prevent its safe passage through the House. Nevertheless, we are committed to giving the Bill proper parliamentary scrutiny because it lacks adequate detail at present, which may, as a result, have unintended and adverse consequences for the industry and, ultimately, for consumers. The problems of indebtedness, which relate to a sophisticated and complex credit market and, increasingly, equally sophisticated and complex consumer demand, place a duty on the Government to supply citizens with adequate information, protection and education. That addresses the point made by the hon. Member for Rhondda.

Gregory Barker: Is my hon. Friend aware that such is the rate of spiralling household debt, in only the minutes that he has been addressing the House, household debt in Great Britain will have risen by about £10 million?

John McFall: May I give a warm welcome to a long overdue Bill, because the current legislation on the statute book is not fit for purpose? I thank the Minister for his welcome appearances before the Select Committee on Treasury over the past few years in which we have investigated the matter.
	I hope for unanimity in the House on the Bill today because surely there can be little dispute about the key issues. The Bill will enhance consumer rights and redress and ensure that the test of extortionate credit is replaced with an unfairness test. The need for alternative dispute resolution has been mentioned in the context of the Meadows case in Liverpool, but given that a case that started with a £5,000 debt rising to £385,000 took 14 years to go through the courts, we need a mechanism to take the matter away from the courts so that such cases can be settled speedily. The Bill will improve the regulation of the consumer credit business because the licensing scheme will be strengthened. I think that all hon. Members hope that the Bill will allow us to tackle the problem of loan sharks, which we have all been banging on about for many years. The Bill will ensure that there is more appropriate regulation when there is an extension of protection to all consumer credit by abolishing the financial limit.
	The discussions that members of the Treasury Committee have held with witnesses showed that there was a general welcome for the Bill. For example, Ian Mullen of the British Bankers Association told me through correspondence that the timing was right and the Bill was drafted sensibly. Sandra Quinn of the Association for Payment Clearing Services said that the Bill will make transparency and marketing much better. John Vickers of the Office of Fair Trading, who has appeared before the Committee to give evidence about the matter, said that the Bill will ensure that credit regulations are relevant to today's growing market.
	The Treasury Committee started its inquiry on the matter several years ago with twin objectives: transparency and a desire to ensure that the market was competitive. Those have been recurring themes since we first read Don Cruickshank's report on banking services. The Committee has been unanimous on that and, indeed, an official Opposition member of it recommended the Cruickshank report so that we could examine the matter in greater detail. We found a market in which the consumer was confronted by complex credit agreements, charging methods, credit cards and other unsecured loan products that often had opaque and ambiguous terms and conditions. We concluded that only when the consumer information is transparent and there are good, fair products will the market be truly competitive.
	The Treasury Committee's concerns were aroused when we had a group of chief executives before us a number of years ago. When we asked how to calculate interest rates, one of them replied, "You need a bit of calculus." So we went to the university of Cambridge, to the deputy director of the Isaac Newton Institute for Mathematical Sciences. We gave him a Barclaycard with a £1,000 debt on it. After a whole afternoon's work, this esteemed mathematician sent us back a six-page document on how to calculate interest rates. It was beyond me, and I am sure that it would be beyond everyone in the House to understand how the interest rates were calculated.

Peter Pike: Does my hon. Friend agree that the way in which the company uses the repayment is also important? People may be charged different interest rates on different parts of what they owe. Usually the repayment is used to repay the part that is subject to the cheapest, not the highest interest rate.

John McFall: That is exactly right. I defy any hon. Member to explain to me in simple terms how their interest rate is calculated.
	When we do not have information readily available, we do not have informed customers and we do not have a level playing field. The need for transparency is still as urgent today as when we took the issue up, even though advances have been made.
	According to opinion polls, 80 per cent. of consumers are unaware of the differences in how interest is calculated, never mind able to work them out. The industry has not yet made a convincing argument, certainly to our Committee, against some form of standardisation. The companies state that this is a competitive issue. The Committee and others do not take exception to that, but there must be some form of standardisation while retaining the competitive aspect. The last thing the Committee and others would want is to take away that aspect. We want it to remain. We have pushed hard on the issue of transparency.
	As a result of our inquiry, the banks and credit card companies have introduced summary boxes on monthly statements. A number of them—not all—are making progress on minimum repayments. We know the concept of the monthly bill stating a minimum repayment. We asked two banks that came before us how long it would take customers to repay the full amount if only the minimum repayment was made. One said 18 years and nine months and the other said 24 years. That is if some of the capital is paid off. But some minimum repayments are only 1 per cent., so the capital is not repaid, and in some cases the customers would never pay their balance off. We are saying to the industry that surely it is right, in fairness to the customer, for that to be on the statement so that they can take an informed decision. If they see that it will take 20 years to repay the debt, perhaps they will do something about paying more to clear the debt more quickly. I am glad to report that both Barclays bank and Lloyds bank have made progress and put that information on the monthly statement.
	There is also the issue of transaction and penalty fees. As we know, fixed fees are charged if payment is not made. There is concern that such fees could result in excess moneys coming into the banks. The banks tell us that they merely clear their costs, but not one has declared that publicly. Indeed, most of them say that they do not even declare it to their shareholders. As a result of our work, the Office of Fair Trading looked into the issue and asked the banks for that information. I hope, in the interests of the banks themselves, that they declare the information in public, because then they could reassure the public that the banks are not exacerbating the problems of indebtedness for low-income borrowers, which some groups such as Citizens Advice, the National Consumer Council and others in submissions to the Treasury Committee have said could be the case. We need that public declaration to provide that reassurance.
	Mention has been made by some individuals of marketing. It is a big issue. We found in our inquiry a real case of a drug addict in a drug clinic who had been offered a £10,000 credit card loan by a company. He was going to take it up to feed his habit, but the supervisor in the clinic saw it and stopped it. I label that as irresponsible marketing. Companies need to do something about it.
	Since the Treasury Committee undertook the inquiry, I regularly receive 40 or 50 letters a week from people all over the country on the issue. I will read one from an individual who said:
	"My son 24 has a cluster of learning difficulties including dyslexia, dyspraxia, Aspergers Syndrome etc, a maths age of 12, cannot read print below 12 point and only half a page—but he holds down a job in known limits. He can enter into an agreement with a Bank or mobile phone company but the Data Protection Act prevents parents who primarily care for him from having details of commitments he makes.
	In February 2002, his Bank"—
	I will not name his bank; it is a major high-street bank—
	"were made aware of his special needs and in June 04 I asked them not to raise his credit limit." But it was immediately raised from £400 to £650 automatically. The parent continues:
	"by late August his overdraft was £660—Bank then convinced him to have a £2,500 loan at 19 per cent. (spent in 6 days)—the overdraft became £1,200 despite my warnings to Bank."
	He then went for another loan of £10,000, which was spent in five days. The letter continues:
	"Bank charges alone now amount to £200 on top of repayments and each time a statement is needed it costs £20."

Stephen O'Brien: The right hon. Gentleman has made an extremely important point. I know of a case in which someone wanted his elderly father to remain independent. However, he did not find it easy to cope with his father's financial affairs, so he sent a notice to the bank asking it to keep an eye on his account. The father never spent more than £50 at a time, but he lost thousands of pounds to a rogue roof tiler and builder. The right hon. Gentleman is making a strong and wise point—we must find an effective binding for high street banks. It should be possible to put them on notice, given that a son has no right to demand a power of attorney to conduct his parent's affairs and prevent them from being ripped off.

John McFall: I am grateful to the hon. Gentleman for his support. I think that we are all at one on this issue. In my discussions with banks, credit card companies and others, we have pointed out that such action would help them as well as their customers.
	The Treasury Committee found that data sharing was crucial. We have heard, and will do so again today, of tragic cases in which people commit suicide. They are a minority, but there is a tipping point for many people. However, information is not available for banks and credit card companies to assess an individual's needs and responsibilities, so a tipping point is reached and extreme consequences result. The Treasury Committee has written to the Information Commissioner and, along with him and the OFT, we are working towards all banks sharing full information on credit cards, as that could help to prevent situations arising in which consumers with a large outstanding debt relative to income manage to make the minimum repayment every month but none the less are struggling. If individuals make a repayment every month they do not come to anyone's attention. However, as I shall illustrate later, someone with 20 or 30 credit cards could be struggling, so the sharing of positive and negative data is extremely important. The Information Commissioner and the DTI have a role in ensuring that comprehensive data sharing is introduced. The lender must always assess an individual's ability to repay, but can only do so with full credit data. They need to make an examination of a customer's full credit commitments in relation to income.
	The lack of data sharing hampers responsible lending. The availability of credit is good for our constituents and society generally. It helps individuals and families to achieve their ambitions, and meets their needs. However, we must make sure that the equation between responsible borrowing and responsible lending is in sync. Since the major banks appeared before the Select Committee advances have been made. Recently, one of those banks wrote to me:
	"I wanted to say how pleased we were that the Committee recognised the progress . . . made in increasing the transparency of our credit cards. As we have said before, we are not complacent and believe it is in the interests of consumers and the business to find ways of increasing clarity and transparency. I can assure you that we intend to maintain this progress in the months ahead . . . We accept that many consumers do not yet fully understand the differences in interest charging methods between credit card issuers."
	Clearly, transparency is still a long way off in the industry. Progress has been made, but the Government must be robust. I am not making any criticisms of the Minister, who has engaged positively with the issue, but it is scandalous that we have had to wait more than 30 years for a consumer credit Bill.
	The country's £1 trillion debt has been mentioned. That is a sizeable sum, but we must remember that more than 80 per cent. of that borrowing is for mortgages on our homes, which are worth more than £3 trillion. If we add the value of other financial assets, including pensions, shares and stocks, the figure is well over £5 trillion.

Malcolm Bruce: I am grateful to the Minister. I am not saying that that was the claim; all I am saying is that a Bill called the Consumer Credit Bill will give people expectations that the legislation may not be able to fulfil. It is in the Government's interest to address that and it is important that we clarify what it is designed to achieve.
	As the hon. Member for Eddisbury (Mr. O'Brien) suggested, some of the definitions in the Bill are less than extensive. Its full effectiveness can be determined only once it is enacted and tested by experience. The same applies to compliance costs.
	The Government propose to extend the existing licensing scheme and ombudsman service, in particular by introducing powers to deal with unfair relationships. That is probably the right approach, but time will tell whether it meets consumer expectations. It is 30 years since the previous relevant Act, and it is interesting to observe that at that time borrowing on credit cards, for example, amounted to £32 million, while now the sum stands at £49 billion. That is a huge change. I will be interested to discover the extent to which the Minister believes that the Bill will deal with unfair relationships in relation to credit card abuse.
	I pay tribute to those in citizens advice bureaux and other advice centres who wrestle daily with the problems of people struggling with debt, and help to resolve their problems by giving them practical advice on how to deal with financial institutions and on how to reschedule, or sort out their personal debt in other ways. The citizens advice bureau that most directly covers my constituency is in Peterhead, although Aberdeen deals with some cases. We have smaller information and advice centres in rural communities that are not involved with or funded by the CAB, including GRAIN—the Gordon rural area information network—the Turriff advice centre and the Keith advice centre. They operate on very small budgets, and many of the people who work for them are very low paid and do it out of a desire to help rather than for the money, or in some cases work as unpaid volunteers. Despite their small budgets, those centres deal with thousands of cases a year and provide real practical help. Perhaps this comment is directed more at the Scottish Executive than at the Minister's Department, but more recognition and funding should be diverted to such smaller organisations, especially when compared with the substantial amount of money that goes to the CAB. That said, I do not in any way undermine the value of the CAB work.
	Several Labour Members have commented on the desire for a maximum interest rate. The Minister has made his position clear, and I broadly agree with it. I understand why the "debt on your doorstep" campaign and others want a specific reference to that to be included in the Bill. However, having listened to both sides of the argument, it seems to me that many of the small-value credit arrangements are effectively dependent on fixed-price charging for debt collection, which is beneficial to both parties because it is clearly understood. That could fall foul of a maximum interest rate. Having said that, several Members referred to cases in which much more unscrupulous mechanisms have been used whereby people are encouraged to roll over debt on increasing rates of interest with additional charges, to the point where by no stretch of the imagination can they be described as anything other than extortionate.
	From what the Minister said, and the hon. Member for Eddisbury agreed with him, we may presume, hope and believe that the unfairness test will catch that practice. The difficulty for Members who want a maximum interest rate specified in the Bill is that that presumption is not provable until it has been tested. I fear that what might happen is that organisations such as the Catholic Fund for Overseas Development will find that they cannot safely operate the kind of arrangement that has applied in the past and which they honestly believe to be mutually beneficial. Such organisations would withdraw from the market and only the criminal fraternity would take on the loans. By definition, its members are outside the reach of any Bill because they do not operate under the law. There is a debate to held about that but we need to take that serious point on board. I have no doubt that an amendment will be tabled and I have no problem with that. However, I hope that those hon. Members who are concerned will ultimately be satisfied that, if the Bill is enacted in its present form, it will quickly establish a test case, which will cover the examples that they have mentioned. I would be surprised and disappointed if the extortionate rates that have been charged in such examples could pass a fairness test. I therefore agree with the Government's approach.
	The Committee that the right hon. Member for Dumbarton (Mr. McFall) chairs has been active on the issue in the past year or two. My hon. Friend the Member for North Norfolk (Norman Lamb), who serves on the Committee, has also been active and kept me apprised of much of the Committee's activity. [Interruption.] Indeed, my hon. Friend has kept the press apprised of that, too. That is a wise course of action for a good Member of Parliament with a small majority. I pay tribute to him for his constructive behaviour as a member of the Committee.
	Focus has been placed on the practices of what might be described as the mainstream of credit—the role of the high street banks, the main financial services companies such as MBNA in Chester and so on. Nobody suggests that they are sharks or rogue traders but they work in a lucrative market and deal with millions of people and they are adopting practices that at least raise eyebrows. I am interested in the extent to which the Bill can tackle those practices. It is important for the Government to clarify that and to explain how practices that the Bill does not tackle could be identified. There is an expectation and a desire for the industry to put its house in order, if necessary through legislative pressure.
	We all accept that there is a dynamic in credit products that we do not want to suppress. We do not want to frame legislation so restrictively that it discourages new products. The hon. Member for Rhondda (Chris Bryant) made an interesting point about unsolicited cheques, pressure to take out loans and 0 per cent. introductions. Of course, he raised legitimate concerns but some people can use such products effectively and to considerable advantage. We need to find a mechanism that warns off and protects people for whom such products are inappropriate without killing them off for those who can benefit from them. There is a constructive policy debate to be held about how to achieve that.
	Although it is clear that financial companies have induced people to take up inappropriate credit—the wrong credit instrument or a credit that they cannot afford to repay—it is comforting that some complain that they have lost £1 billion a year through the astuteness of those who have managed to use 0 per cent. introductory fees, roll them over and not pay any interest on anything for a considerable time. Of course, we all ultimately pay for that but it is important that the process of regulation is about trying to help people to make informed decisions and prevent them from being pressured into making inappropriate decisions.
	The Government could help us to adopt two or three instruments that might assist in the process. The transparency of interest rates has already been discussed. I accept the point about financial literacy but it is a basic requirement of credit to know what the interest rate is. I therefore concur with the right hon. Member for Dumbarton and the Consumers Association that one standard method of presenting interest rates is desirable and, preferably, some broad agreed procedure about how they are applied. One method of calculating them is certainly desirable so that people can make a direct comparison and know that they are comparing like with like, not apples with pears.
	I would go further and say that it might be helpful for the Bank of England, the FSA or some other appropriate body to publish an annual average or a range of figures so that people can make a comparison. Perhaps there should also be a requirement that this information should be drawn to people's attention when interest rates are being offered. Along with the 0 per cent. rate, and the introduction of the bonus interest rates, there are credit card interest rates as low as 7 or 8 per cent., yet some store card rates are well over 30 per cent. With the rate of inflation at 2 per cent. and the Bank of England interest rate at 5 per cent., those represent very high rates of interest, and the differences between the available rates are substantial. People ought to be aware of the ways in which they might be able to get a cheaper rate.

Malcolm Bruce: Actually, it is possible to interpret the Bill as worded in that way, and clarification would be helpful. It would be extreme to act against a company with 200 branches and fine it £50,000 times 200. It would be right to fine the branch, or the company on its behalf, that perpetrated the offence. Certainly, the issue needs to be explored a little further.
	The hon. Member for Dundee, East (Mr. Luke) asked about time orders as they affect Scotland. As I understand it, lay representation is possible in relation to time orders in England and Wales but not, apparently, in Scotland. If the Minister has not done so, I suggest that he consults with the Scottish Executive, as a Sewel motion, or some simple mechanism, might allow us to bring the legal position into line. It seems to me that there is a desire for that change in Scotland, and there is no point in the Scottish Parliament having to deal with the issue separately. If the Scottish Executive are agreeable, I urge him to report back on that.
	As I said at the beginning of my remarks, uncertainty about the effects of the Bill can only be resolved by practice. The hon. Member for Eddisbury has suggested, and will no doubt produce, amendments to try to tie down some of the terms of the Bill more specifically. My experience of dealing with the Office of Fair Trading, on which he and I have had a number of exchanges, is less than satisfactory in a number of cases. It does not regard itself as a consumer association but as a competition agency, which belies its title and people's expectations of its title.
	If I may stray marginally, to illustrate this point, I have been exercised by a concern about estate agents and the need to license them. In my view, the OFT examined that and came up with a totally windy and weak response. There is an estate agents association, which has its own terms of reference that could have been adopted for all estate agents. That association would have acted as a consumer protection agency. The OFT concluded that it was not its job to protect the consumer, but only to determine whether there was fair competition. I am concerned that the OFT's psyche is not always what I would expect it to be. Giving it too much discretion may mean that it even disappoints the Minister in terms of what it is required to do. Certainly, some clarification and debate in Committee would be necessary, to put it no higher than that.
	On my final concern, I accept that the compliance costs as stated in the Bill do not appear unduly large in relation to the total value of the industry. Nor do I have any special brief on behalf of the companies which, in most cases, would probably have little difficulty in meeting them. Nevertheless, that can only be an estimate, as there are too many uncertainties. I am not suggesting that the Department has not made its best estimate, but in many cases, the courts will decide, the matter will be referred to the ombudsman, or information may be required. We do not yet know the environment in which information will be required but we hope that the ombudsman and the spirit of the law will reduce court involvement and that many of the cases will be resolved long before they come to court. Surely that will be one of the great benefits of the legislation if it works properly.
	Until we know how the balance works, we cannot be sure of the compliance costs. I urge the Government to review the arrangements in practice, to establish whether all the mechanisms are working cost-effectively, efficiently and not in too burdensome a way. Given that European legislation is emerging in parallel with the Bill, I also urge the Government to ensure that the two are complementary and that there is no duplication. We do not want costs to be doubled unnecessarily.
	Although we all like to make a big issue of concerns about regulation for political purposes, I trust that the House in general accepts that legislation should not involve unreasonable compliance costs and should not be unnecessarily bureaucratic, but should be fit for the purpose and pitched at a level that will enable it to deliver the end result; and that we should review it to establish whether we have overdone it, or gold-plated it to a greater or lesser degree. In view of the uncertainties in the Bill, it would be helpful if the Government committed themselves to reviewing it, perhaps publishing a report in four or five years.
	Having said all that, I will end by saying that I welcome the Bill. The general consultation has clearly produced a good deal of consensus. What the Bill will deliver is not yet entirely clear—I hope that the Minister's reply and, subsequently, the Committee stage and Third Reading will provide further elucidation—but I hope that it will genuinely deliver more protection for the consumer, a better-informed public, and an industry that, while continuing to innovate and to develop new products, remains conscious of its social responsibility and general duty to be fair. I hope that we will end up with a vibrant credit industry which, nevertheless, leaves people less prone to the dire debt into which some have got themselves.

Peter Pike: I am glad to have the opportunity to speak—but observing how many others still wish to do so, I have put a red line through much of what I was going to say.
	I support the Bill, and most of my speech will be devoted to explaining why I believe it is necessary. It is very much in line with the Government's policy of reducing the number of children in poverty. As has been pointed out several times today, the poorest section of the community is ripped off most by extortionate interest rates and hidden charges. The section of the community that can least afford it pays the highest penalty and suffers the most. The Bill attempts to tackle that.
	Which? and the Consumers Association also welcome the Bill, but want it to go a bit further. The association has expressed concern about annual percentage rates, which a number of Members have mentioned, and about irresponsible lending. How can lenders be responsible if they do not take into account the full credit history of those to whom they lend, and do not know what debts and other problems they may already have?
	The Consumers Association has referred to
	"sneaky tricks and hidden charges",
	which have also been mentioned today. My right hon. Friend the Member for Dumbarton (Mr. McFall) mentioned charges for late payment and the exceeding of credit limits, which tend to take no account of whether the limit has been exceeded by only £1, or for only one day. Such charges can be totally unfair, and they are much more prevalent than we realise. Last year one in four people with credit cards incurred a penalty charge at some stage, and Which? estimates that the credit card companies took £427 million as a result. That is a major problem.
	As my hon. Friend the Member for Rhondda (Chris Bryant) pointed out, every time we open our post at home, we are bombarded with letters offering us money, and even cheques. On the television and in the press, such organisations are constantly throwing money at people. But they do so indiscriminately, throwing it at those who cannot afford to borrow it, and without taking into account their particular situation.
	Mention has been made of the NACAB, to which I shall refer extensively. Burnley District Citizens Advice Service provides a very good debt service. There is only one problem with it: there is too big a queue of people waiting to see its advisers. So that the advisers can do their job properly, analyse people's circumstances and give good advice, such people unfortunately have to wait, yet they might desperately need such information, and quickly. None the less, the Burnley advice centre does its best—indeed, it does an excellent job.
	According to the NACAB report "In too Deep", which was published in May 2003, in the five years to 2003, CABs reported a 24 per cent. increase in the number of new debt inquiries and were dealing with more than 1 million a year. Over the same period, inquiries about consumer credit debt rose by 47 per cent. According to a NACAB survey of those seeking advice about debt problems, about three quarters of all clients were on incomes lower than the national average. Almost a third said that they were claiming income support or income-related jobseeker's allowance, and 13 per cent. said that their wages were being topped up by tax credits. Those percentages are much higher than those for the population as a whole. These findings suggest that people on low incomes and benefits find it difficult to budget without accessing credit, and that similarly, they struggle to repay such debts. The Government are committed to trying to help such people—the poorest section of the community—who are currently at greatest risk.
	A Lancashire CAB told the "In too Deep" report that one of its lone parent clients in receipt of income support owed more than £12,000 to four creditors. Bankruptcy had been discussed with the client, but she could not afford to raise the £250 deposit fee for the Insolvency Service. The CAB negotiated token repayments of £1 a month to her creditors, but it would have taken her more than 250 years to repay the total debt. The result was unpleasant calls from debt collection agencies and a great deal of distress to the client.
	A 2001 survey of CAB debt clients showed that each had an average of five and a half debts, totalling more than £10,700 per household. The debt-to-income ratio showed that the average debt was nearly 14 times the level of income. Of course, total debt includes elements such as council tax debts and money owed to catalogues; I am not suggesting that it consists entirely of credit card debt.
	The provision of credit to low-income consumers is on the increase, and given that their circumstances increase the need for such credit, it can prove very costly. A CAB in the north-west told those who compiled a NACAB report of December 2000, entitled "Daylight Robbery", of a new practice used by a mail order company. It appointed company representatives to take orders and collect payments, adding an interest charge of 90.5 per cent. APR for that "extra service" in doing so. In one case, a CAB client who purchased a suite through the catalogue in question paid £15 a week for 40 weeks. She thought that that constituted full settlement, but was then told that she still owed what was a very substantial interest charge.
	High-cost products can also be a problem. In the "Daylight Robbery" report, a Lancashire CAB tells of a client who had replacement windows installed at a cost of £5,150. After paying the deposit of £1,150, she was persuaded by the company in question to take out a loan, which it arranged. The agreement required her to pay £96.48 a month over 10 years. That comes to £11,577.60. The client was unaware that the loan would be over such a long period, and after three years she realised that she could get a better deal elsewhere and asked for a settlement figure. The figure quoted was £6,323—£1,173 more than she had borrowed in the first instance.
	Although there are cooling-off periods, the reality is very different, especially when high-pressure selling techniques are applied to people in their own homes when they already under pressure. Clients have their problems aired on TV and elsewhere, and there is no doubt about the reality of the problem.
	It is not only high interest rates that can trap someone in debt. People with credit cards with low credit limits can find that the addition of administration charges can soon make a debt spiral out of control. The CAB report refers to a Lancashire client who had a debt on his credit card of just £200. He fell ill, had to stop work and claimed incapacity benefit. The credit card company would not accept the offer of repayment that the client made, and continued to add interest and late payment charges. By the time the credit card company finally agreed to accept his offer and suspend the interest, the late payment charges had increased the £200 debt on the card by 150 per cent. That is the nonsense that many people face.
	Finally, I want to deal with consolidations. They are advertised on the television and Carole Vorderman sometimes comes on the screen in the mornings. People know her and her expertise in mathematics from her role in "Countdown", so they listen and believe that she offers a way forward. They often do not realise what the small print says—that taking a consolidation loan might mean securing it with their homes. If people cannot pay in the first instance, and then they cannot pay for the new consolidated loan either, they put their homes at risk as well. A consolidation may be appropriate in some cases, but not in others. People must think carefully before opting for one.
	I spoke to a credit card company at the weekend and heard about offers to transfer cards to zero rate and so on. While I was talking, the woman asked me whether I realised that 0 per cent. up to April is not as good as 3.9 per cent. for the lifetime of the loan. Depending on when and how one wants to pay, that may well be true, but people do not look carefully enough at the conditions.
	I could say a lot more about such issues, but I shall finish by citing a letter from a constituent that I received in November. I have written to the two companies named in the correspondence, but I will not name them here today. I wrote on 10 December, but I have not yet received the courtesy of a response of any kind. I shall give them a little bit longer. My constituent wrote:
	"A few years ago I took credit with the . . . company so I could have some repairs done to my car. The original amount was for around £470. I got into some financial trouble after I separated from my wife and handed all my debts to . . . debt management company, who have been handling my debts for about four years".
	He now owes £1,174—more than he started off with, after paying for several years. The company has not, as I said, had the courtesy to reply to me. It is that type of rip-off exercise that I hope the Bill will deal with.
	I have great respect for the Minister, who has admitted that the Bill will not tackle all the problems. That is true, and we need the Government to take further action. Which? said that it would be good to go further, and I agree. I hope that the Minister will not soften the Bill in Committee. If anything, he should make it tougher, which would do a great service to the many people in this country who are being ripped off.

Angela Watkinson: This will be a largely consensual debate, because each and every one of us has had constituency cases through which we have become familiar with the suffering that unmanageable debt can cause. I welcome the new legislation, which is aimed at providing a fair deal for customers. It is necessary because household debt broke through the £1 trillion barrier in July last year and is predicted to rise to £1.1 trillion this year. It took 600 years of banking history for household debt to reach £0.5 trillion, and it has doubled, while the savings ratio has halved, since 1997. Interestingly, in an intervention in the speech by the right hon. Member for Dumbarton (Mr. McFall), the Minister said that household wealth had doubled in that time, and that illustrates the declining propensity to save.
	As many as one in 20 households now pay up to a quarter of their income in consumer credit repayments. Many families and individuals have combined mortgage and credit card debt that will become unmanageable if interest rates rise again—there were five increases last year. People who overstretch themselves leave no margin for an increase in repayments and are heading for trouble. Recoveries by bailiffs are increasing dramatically, and debt advice centres are facing unprecedented demands for help. Behind each of those examples are stories of misery for the families involved.
	Greater transparency and simplicity is needed in the consumer credit and loans industry, but it is important that our new measures have a positive impact on business as well as benefiting borrowers. I shall concentrate my remarks on the changing social attitudes to debt. The explanatory notes attached to the Bill refer to the Consumer Credit Act 1974 and the term "hire purchase". We do not hear that much these days, but I recall when it was first introduced. It was talked of in shocked whispers. The word "hire" in that phrase illustrates the attitude to credit then, as it implied that people did not own the item that they had borrowed money on until they had made the last repayment. Until then, it was only on hire and still belonged to the company that had provided the loan.
	Attitudes have changed completely over the years. It is now regarded as smart to use other people's money, especially when it comes to credit cards. We have heard several hon. Members describe how interest payments can be avoided by changing debts from one credit card company to another. Cash has also become much less popular. Money-back guarantees on faulty purchases are also attached to credit cards, which make them attractive. Many people have multiple cards. There was only one type in 1971, and now more than 1,300 are available. The companies vie for customers by making the terms and conditions seem more and more attractive.
	Store cards often offer 10 per cent. off as an incentive, but the issuing procedures for store cards are especially casual. Some constituents of mine moved house to a new area, and six months later, applied for credit to buy a new car. To their astonishment, they found that their credit rating was not good, even though they did not owe any other money. The people who had moved into my constituents' old house had picked up some junk mail with their names on and used it to apply for a range of store cards, run up debts on all of them and failed to pay. The assessment procedures for those store cards must have been very lax. Stores should be more circumspect when issuing cards, to ensure that they are issuing them to the right people.
	Some stores must have had bad experiences. I recently went to buy a small item of furniture and the store staff started to ask me for all sorts of information. I said that I did not want credit, nor did I want the item delivered, because it would fit in my car. However, they still wanted to know my name and address, how old I was and what I had for breakfast! I was not willing to give that information, so they lost a sale. However, that situation might have arisen because the store had had experience of bad customers.
	People buy on credit what they cannot afford. They often buy poor quality goods to minimise the size of the loan. The goods do not last, and often do not outlive the term of the loan. People remain in debt, with nothing to show for it. I often wonder about the frequent television advertisements for sofas with nothing to pay for five years. Anyone with several young children will know what a sofa looks like after five years. People must be in perpetual debt, because at the end of the five years they will need another new sofa.
	It is also popular to add the cost of a holiday or a new car to a mortgage. Have now, pay later. But people pay much more when they pay later. I welcome allowing customers the right to challenge unfair lending practices, and improving the regulation of consumer credit businesses through measures to drive out rogue money lenders who charge extortionate rates of interest.
	Every now and again, I receive a batch of letters from secondary school pupils in my constituency, arising from their citizenship lessons. In the main, they are full of idealistic notions. Sometimes the pupils want to know what I think, but more often they want to tell me what they think about how the world can be put to rights and how everything can be improved. They have some good ideas—if only money were unlimited—but they obviously have no idea at all about money or the economy, about where money comes from and how it circulates. I endorse the comments of my hon. Friend the Member for Eddisbury (Mr. O'Brien) on the establishment of links between banks and building societies and the teaching of citizenship in schools, so that students can learn that everything has to be paid for, and that everything comes originally from taxation in one form or another.
	People need not just to know but to understand the total cost of a loan over the whole repayment period—not simply the purchase price—because it may not be the bargain that they thought. They need to know the cash price, plus interest, plus any default charges. If all that information is available, they can take full responsibility for their decision. They need continuous information on the progress of their loan payments. That is in the best interests not only of the borrower but of the lender. We must not ignore the rights of lenders. They are sometimes the victims of bad payers and have to write off those debts. Such information would prevent debt escalation, increase the likelihood of payment and take into consideration unforeseen circumstances, such as redundancy, illness or accident. Lenders need to distinguish between people who cannot pay and people who will not pay, and to make arrangements for those who want to pay but are in temporary difficulties. They could either increase the term of the loan or reduce the payments.
	Debt counselling is a growth industry, as several Members have said. Important as it is, none the less it is shutting the gate after the horse has bolted. As important as debt counselling is budget management advice. If that were available, it would help people to avoid debt in the first place. Such advice should include how to make the best use of a modest income and remain solvent, and how to deal with aggressive doorstep salesmen. I was pleased that the Minister said that that point was under consideration.
	Some people respond to newspaper adverts about goods that they think they might want, although the cost is never clear and there is an inquiry tick-box on the advert. An aggressive salesman calls and only the most resistant and robust customer will be able to get that man out of the door without having signed up to buy something, possibly at a cost that far exceeds what they would have paid elsewhere. People need to know how to assess whether a bargain really is a bargain, and how to calculate the full cost as opposed to the cash price.
	Prevention is better than cure. Helping people to avoid debt in the first place is much easier than trying to resolve the problem afterwards. The Micawber principle still holds good. Borrowing up to one's repayment limit, with no cushion against the rainy day that always turns up when it is least convenient, is a risky way to live.
	Over recent decades, things have changed dramatically. Waiting for something until one has saved up for it is no longer popular. People want things now—today—whether or not they can afford them. Somehow, they think that tomorrow will take care of itself. The result is that personal debt in Britain is increasing by £1 million every four minutes, as my hon. Friend the Member for Bexhill and Battle (Gregory Barker) pointed out. Unfortunately, for many people who are just managing to service their outstanding loans at current interest rates, another rise could just shift them into the unmanageable category, and the downward spiral of defaulting on payments and accelerating debt. I welcome the provision of more information, and information that is easier to understand, for borrowers.
	I should like education at school and beyond to go much further, to promote real understanding of how money circulates in the economy between income, taxation, spending, borrowing and saving. For a healthy economy and a stable society, we need a balanced approach to consumer credit that gives lenders and borrowers a fair deal, and I wish the Bill fair weather in Committee.

John Battle: I, too, welcome this long overdue Bill and compliment the Minister for investing his energy and time in getting it this far. I say to the hon. Member for Eddisbury (Mr. O'Brien) and other hon. Members that the whole House understands the needs for action. If I were to make only one jibe, I would say that we do not want to get the Bill swiftly through Parliament because of speculative election deadlines. I am anxious that desperate people who are locked into long-term unsustainable debt should not wait a moment longer for us to take action.
	The Bill provides a good framework. It is time to review and bring up to date the Consumer Credit Act 1974 because the markets have moved on. I shall make my next point briefly because there should be a decent discussion about it in Committee and on Report: although the Bill provides a good framework, there could be some tightening up of the nuts and bolts at the corners and the joints. We must ensure that the Bill provides greater protection for consumers who borrow money, not least the 10 per cent. of consumers in Britain who use home credit at some time in their lives—in other words, they pay back their debt through weekly doorstep payments. I want to focus on strengthening protection for low-income borrowers who are at risk from high-cost credit lenders.
	We rightly hear much talk about people getting into difficulties with credit cards and the high rates of interest charged by the high street banks, but I want to focus on the 7.9 million people who do not have a bank account or credit card and turn to doorstep lenders and television and newspapers adverts for cash because they have no alternative. Such people in practice end up paying the most to borrow money, which is sometimes used to provide their daily basics. Unjustifiable charging locks the poorest in our society into deep and long-term debt because they are often left with no alternative if they are to survive from week to week.
	Experts in the heady world of economics refer to financial shocks, which are unexpected events. Such events in the everyday world could include the arrival of a new baby because of the need for a pram or carry cot and provisions for that child. If a relationship breaks down, people might need to set up a new home and thus buy a bed, sofa, cooker, curtains and carpets. Youngsters changing schools can cause financial shock because they require new gear and clothing to go there.
	At first sight, and under such pressure, a person might think that a payment of £4.99 a week is a manageable offer if that is what is in front of them, but the weekly repayments from home loan companies, credit stores and cash converter businesses involve a huge rack-up of compounding annual percentage and penalty charge rates that can hardly be noticed in the small print. The problem is that people can agree to pay back £4.99 over 156 weeks, but with some firms they end up paying back £432.38. People who borrow £100 cash from some companies will be charged £191.76. Another company about which I heard in my surgery lent someone £100, but they had to pay back £220.24, which is a percentage mark up of 440 per cent. The doorstep lending system is locking many of the poorest people into long-term poverty, if not resulting in the repossession of the little property that they have. Yes, such lending is legal, but it usually involves incredibly high interest rates.
	I am grateful for the work of Andrew Hutchinson, a campaigning journalist on the Yorkshire Evening Post, who has talked to people about the situation. It is incredibly difficult for people to come forward and spell out their circumstances, not least because to do so can jeopardise their chances of future borrowing. High-cost borrowing is driving people into debt and despair.
	I congratulate Church Action on Poverty on its campaign to end doorstep debt. It has spelt out the need for action. I have been asked whether people who borrow from doorstep lenders are incredibly na-ve, simply trying it on or desperate. My answer is that they are all of those things in different degrees. Some people are trying it on, and lenders should be pressed to check rather better whether people have the capacity to repay, rather than simply saying, "We have a check-free approach; here's the money". However, the usual reason that turns people to the home credit market is desperation.
	To protect low-income borrowers from high-cost credit, I am still minded to support those who argue for a ceiling on interest rates and charges, because so often it is the compounding of interest and charges that drives people into long-term, unsustainable debt. It can be compounded with rollover loans that translate a few hundred pounds into thousands, if not the loss of one's house, as we have seen in some recent high-profile cases.
	In the depression years, a cap was introduced. The Moneylenders Act 1927 provided that a rate of more than 48 per cent. was prima facie excessive and the transaction was therefore deemed harsh and unconscionable. In 1974, the Conservatives' Consumer Credit Act dropped that ceiling. I press the Minister and the House to reconsider putting the ceiling back. There are ceilings on interest rates in many other European countries and many states of the United States of America. Like consumer protection groups, I believe that a cap would protect the poorest from excessive credit charges, especially when people have no alternative to high-cost loans.
	I welcome the Minister's commitment to review the need for a cap, but if his review comes up with the need for one, how can it be introduced if we have not used this opportunity of legislation to keep the option open of introducing one? Can we not build into the Bill the option of secondary legislation? A statutory instrument could be subject to affirmative resolution so that the House would be consulted and vote on it, but at least we would have the means to introduce a ceiling. That might act as a warning to those who overcharge.

James Plaskitt: Does the hon. Gentleman accept that the savings ratio in this country is strongly geared to the housing market, and that on the two occasions under the previous, Conservative Government when there was a house price boom, the savings ratio fell to levels lower than it is today?

Gregory Barker: There is a grain of truth in what the hon. Gentleman says, and look what happened. If he is arguing that the result will be a recession and another house price collapse like we saw in the early 1990s, my constituents will take that warning from him. I am staggered that anybody could stand up in the House and praise the collapse of the savings ratio. For anybody who is economically literate, it must be a matter of grave concern that people are spending more and more and saving less and less. Whatever asset price inflation has been, the percentage saved against those assets is declining. The hon. Gentleman and his Government who support that culture are storing up problems for future generations.
	As hon. Members in the Chamber may know, for some time Consumer Credit Counselling Services has been lobbying for changes, requesting measures that will allow consumers to enter into credit agreements in a far more informed way than they have done to date. We must not ignore individual responsibility, but we cannot expect everyone who enters into a credit transaction to be an expert on all parts of financial accounting relevant to their agreement. As many of us are aware, financial regulations and credit agreements are often complex transactions requiring much time and effort to be invested in understanding them, to ensure maximum benefit for borrowers.
	Of course, consumers must make themselves aware of the issues likely to arise, but we should not expect the average person to be a financial expert capable of understanding the frequently confusing and endless small print at the bottom of documents. We must realise that the worst credit arrangements are often taken up by those least able to understand the small print and those who, with a pressing need for credit, are not in a position to shop around. However, it is important that consumers take some responsibility for their financial decisions, so I support measures that encourage consumers to expand their financial knowledge. Personal responsibility cannot and should not be shirked, but for the most vulnerable and least fortunate their circumstances often mean that financial decisions are very difficult and are made quickly and under enormous pressure.
	The issue needs to be addressed by both firms and consumers. I applaud the inclusion of clauses requiring creditors to provide people entering into credit arrangements with appropriate financial information. As other hon. Members have said during the debate, we need to ensure in Committee that the Bill enforces clear, like-for-like comparisons. Firms and consumers have a mutual interest in the consumer credit market working more efficiently, which requires confidence and ability to be developed in all parties. I welcome measures by some private and public sector bodies that have been working consistently towards such objectives. I am further encouraged by attempts to establish a national strategy in the Bill that will place legal obligations on parties to provide access to information, raising financial awareness and competence among consumers and businesses.
	What impact will the Bill have on financial service businesses? It is our duty as representatives of our constituents to ensure that we legislate for the industry in a manner that provides sufficient safeguards and protection for consumers, especially the most vulnerable. Simultaneously, however, we must also seek to maintain a delicate equilibrium between adequate consumer support and a strategy that does not overburden business without obvious benefit to the consumer.
	I draw hon. Members' attention to a point made by the British Chambers of Commerce. Although it has strongly supported moves to limit unfair practices in the consumer credit market, it has warned that businesses should not be subject to over-burdensome legislation that has no positive effect. I am sure that my hon. Friends agree that there is little to be gained by imposing unnecessary regulations on an industry without any benefit to consumers. It is therefore imperative to recognise that although the Consumer Credit Act 1974 has served some consumers well for many years, it has little to do with the new consumer credit realities of today.
	The progression of time, the varying needs and demands of consumers and the advancing pace of the credit market require the reconsideration and reassessment of present consumer credit legislation. Such efforts will ensure that we implement the structure best able to offer the necessary and appropriate levels of protection to both companies and, most importantly, consumers.
	A similar sentiment is apparent in the data collected by the consumer magazine Which?, which regularly publishes reports relating to consumer issues. Last week, it released a critical report on the consumer credit industry highlighting existing unacceptable practices, which range from high penalty charges issued on late payments to the hard selling of insurance polices, all of which involves targeting vulnerable consumers up and down the country.
	Importantly, Which? has also responded favourably to the announcement of plans to reform the existing legislation by asserting, as we have recognised today, that the 1974 Act is
	"desperately in need of an overhaul",
	and that
	"transparent information and products will create a truly competitive market".
	I shall briefly return to spiralling levels of household debt. Although I have already outlined my support for measures to update legislation that is ill suited to our current credit climate, my support for the Bill is strengthened by my concern about spiralling levels of household debt. Although the Government inherited a history of household debt—as others have said, it took some 600 years to amass—it has doubled in this Labour Government's lifetime to more than £1 trillion.

Gregory Barker: I am afraid that that is a frivolous intervention. The Bill has nothing to do with the Conservatives—it is a Government Bill that we are supporting and trying to improve. Making frivolous points like that does not advance the argument very far.
	US credit consumers receive notably better protection than their British counterparts. On the other side of the Atlantic, consumers have the Truth in Lending Act, the Equal Credit Opportunity Act and the protection of the Unfair Debt Collection Act, ensuring that the consumer credit playing field is significantly fairer to all participants. The Fair Credit Billing Act has also done much to enable errors associated with credit arrangements to be investigated and swiftly put right.
	Examining the relationship from the perspective of the lender in the USA, there is a clearly defined duty requiring lenders to "know their customer" by recognising the consumer's credit needs and requirements and matching them with appropriate credit services. I was struck by the moving story told by the right hon. Member for Dumbarton (Mr. McFall). Had the lending institution that he mentioned known its customers, one would hope that it would not have provided credit in a way that produced such a great deal of misery for his constituents.
	Some US states have progressed even further, demanding that legal action be taken against credit card companies who have, through irresponsible methods of lending, trapped customers into a spiral of escalating debt. While America has responded to match an evolving credit landscape with improvements and developments in legislation, the British consumer has been left with the Consumer Credit Act 1974—legislation that simply does not reflect the debt reality of Britain today.
	Such concerns about the problem of indebtedness were recently acknowledged by the Bank of England in its financial stability review. It notes in its studies of the potential long-term financial outlook for this nation the risks that personal debt may pose to the macroeconomic stability of this nation, and urges that the seriousness of that statistic be appreciated. Although I am cautious about how far the Bill will be able to resolve many of the issues of personal indebtedness, I remain supportive of the steps that it will take in moving towards making that a more realistic possibility.
	I have been lobbied—as, I am sure, have many hon. Members—by several interest groups and people in my constituency. I was particularly struck by the e-mail that I received from Mr. Ian Clark on behalf of the diocese of Chichester, which covers Sussex and includes my constituency. He says:
	"On behalf of the Diocese of Chichester, the church applauds the improvements that the Bill proposes to the regulation of consumer credit in this country—the current legislation is over 30 years old and clearly in need of significant improvement."
	He points out:
	"The UK has the highest levels of consumer debt in Europe—relative to incomes it is higher even than the well-known debt problems in the USA. Our churches have to deal on a daily basis with the results of crippling debt".
	He remarks that MPs too will regularly see in our surgeries the problems that it throws up, and continues:
	"The results are not just personal financial ruin, but health and psychological problems, homelessness and family breakdown.
	My churches believe that the Bill needs to be strengthened even further in a few key areas to more adequately protect low-income borrowers from high-cost credit and predatory practices. They note that the consumer credit industry has been investigated by the OFT and recently referred to the Competition Commission. They also note that the Consumers' Association's recent Which? report highlighted many of the unfair practices"
	in its report, "Sneaky Tricks and Hidden Charges".
	Mr. Clark made a particular request that we consider certain amendments in Committee, the first of which is:
	"To give the power for the Government to introduce maximum levels of interest and charges if this proves necessary in future—at the moment many poor debtors suffer scandalously high marginal APR percentages and unreasonable . . . charges".
	Several Labour Members expressed interest in that today, and it will bear consideration in Committee. Such an important issue needs to be addressed in primary legislation.
	The next proposed amendment is:
	"To introduce an affordability test that will reduce irresponsible lending by some . . . finance companies—see Clause 19."
	The next amendment reads:
	"To improve the OFT's regulatory licensing powers over lenders and intermediaries—see clause 38, including fines that are reasonable in light of the severity of offence—similar to the FSA model, not limited to £50,000".
	I share that concern and we shall test that matter, too, in Committee.
	Another suggested amendment proposes that clause 15 should require lenders to provide better and more prominent information to borrowers in line with the recommendation of the Treasury Committee. The clause does not currently require lenders to provide comprehensive and clear information.The diocese also suggests that the use of time orders by the courts should be encouraged through clarifying sections 129, 130 and 136 of the 1974 Act.
	We cannot escape the fact that legislation is needed to keep pace with developments in the consumer credit industry. We need to do more to protect the most vulnerable in society from aggressively marketed and unscrupulous lenders. The picture of spiralling household debt that I have described appears throughout the nation, affecting all regions and reflected in the entire spectrum of society. The problems associated with consumer credit have created an untenable financial position that requires urgent attention. Legislation must meet the realities of the consumer credit market.
	The Bill is welcome but far from perfect and requires proper scrutiny and improvement in Committee. However, I support the provisions that are aimed at creating a more favourable balance for the consumer, establishing a competitive environment, removing rogue traders while inspiring consumer confidence in the credit market and ensuring a more promising credit landscape in the future.

Ross Cranston: I welcome the Bill, which must be viewed in the wider context of "Promoting Financial Inclusion", which the Treasury published as part of the pre-Budget report, and the strategy on over-indebtedness. Both documents emphasised the role that credit unions can play. However, it is high time for a review. I accept and welcome the fact that we have a vibrant credit industry but there are casualties to whom we must give attention.
	First, I welcome the information provisions. Parts of the industry, such as the Finance and Leasing Association, have criticised, for example, the warnings, the notice of arrears and the notice and information provisions on default. However, I believe that they constitute a proportionate response.
	Secondly, I welcome the changes in the licensing provisions. From the publication of the first edition of Cranston's "Consumers and the Law" in 1979, I have criticised those provisions on the basis that they were the nuclear option. One had to withdraw the licence, which was not a practical step. The Bill contains a graduated response in the detailed restrictions that can be imposed and the civil penalties. However, I accept that the civil penalty of £50,000 should be alterable by statutory instrument.
	The licensing provisions are important in the context of shark lending. The citizens advice bureau in Dudley has given me a list of the intimidating behaviour of some rogue lenders that includes bullying, telephoning debtors at work and at relatives' houses, telephoning at all hours of the day and night, claiming that goods can be repossessed when they cannot because the debtor has made payments beyond the limit that the legislation prescribes and saying that clients are liable for the debts of others such as close relations.
	However, the problem is not confined to what I have just described. As my right hon. Friend the Member for Dumbarton (Mr. McFall) pointed out, the big banks also have a responsibility. Let me give one example from my constituency. A bank lent a 71-year-old lady, who is on pension credit, £1,700. Her monthly income is just under £490 and she has to pay £418 a month. The result is penury.
	Much depends on enforcement. Tomorrow, I shall visit the west midlands anti-loan shark pilot, which the Department of Trade and Industry set up. I commend that initiative. I have already been in correspondence with Tony Quigley and his team. They have identified one lender in the west midlands region that charges an annual percentage rate of between 8,000 to 10,000 per cent., with hundreds of clients. The team has already done good work in getting what are in effect injunctions against some lenders. They say that their hand would be strengthened if they had a power of arrest for illegal moneylending on the basis that if the perpetrators were arrested, clients and victims would come forward.
	Thirdly, I want to deal with the unfairness provisions. The hon. Member for Eddisbury (Mr. O'Brien) made a good point when he said that we need more definition by the time the Bill reaches Committee. The old moneylending provision involving the presumptive 48 per cent. unfair interest rate is no longer appropriate. Unfairness itself is not an objectionable test; it operates in the context of the Unfair Terms in Consumer Contracts Regulations 1999. The regulations, however, contain a grey list that identifies what might be unfair. There is a good argument for saying that unfairness should be specified to a greater extent; otherwise, as my right hon. Friend the Member for Leeds, West (Mr. Battle) said, every district judge in the country could come up with a different decision, resulting in cases going up to the Court of Appeal. The Government should specify the criteria needed in that respect.
	I take the point in the briefing from Citizens Advice that the restriction of the application of this provision where judgment has been secured is objectionable. The reason is quite simple. Many such judgments are reached by default; the consumer has had no say in the matter and the judgments are simply rubber-stamped. There needs to be a mechanism whereby those judgments can be challenged.
	I very much welcome the use of the financial ombudsman; this is a real example of alternative dispute resolution. There are other provisions in the Bill which I also welcome. There are also omissions, as some of my hon. Friends have pointed out. One point that has not been mentioned is the section 75 issue, which involves the question whether consumer credit payments abroad are covered. The academic view has always been that they are, but a High Court judge said in a recent decision that they are not. This is a good opportunity to clarify that matter.
	Commentators such as Professor Sir Roy Goode have pointed out a number of defects in the current legislation. They are technical defects, and I think that I had better write to my hon. Friend the Minister about them.
	In summary, this is a good Bill, and I very much hope that, with the beneficial tinkering that I have talked about, it will be an even better one.

Andrew Selous: We should all agree, in a debate in which we are making considerable criticisms of the lending industry, that responsible lending is important to all our constituents in helping them to navigate the financial pressures that we all face at various times in our lives. It is ridiculously easy, however, for our constituents to borrow wholly irresponsibly at a time when debt has spiralled and savings have plummeted. Total personal debt in the UK now stands at £1 trillion. I am not a mathematician, but it might be helpful to the mathematically unfamiliar if I say that a trillion is a 1 with 12 noughts after it. Unsecured personal debt has doubled since 1997. The director of policy advice at Citizens Advice reported on 30 July 2004 that, over the past six years, there had been a 44 per cent. increase in the number of people coming into CABs with debt problems. This is not debt that people can cope with easily. We know from Citizens Advice, which everyone has praised today, that this is a widespread national problem.
	I would like to pay credit to the two citizens advice bureaux in my constituency, and to praise the excellent work that they do in Dunstable and Leighton Buzzard. I am grateful for the funding that they receive from South Bedfordshire district council, which in some cases helps them to employ additional financial advisers. I am also delighted that a credit union is about to be set up in the Downside area of Dunstable. I would like to see more credit unions in operation because they have an excellent record of operating in many areas of our constituencies that other financial institutions do not reach.

Andrew Selous: The hon. Gentleman is absolutely right. I believe that the President of the United States of America is also a member of a credit union. I intend to join the credit union set up recently in my constituency. He is right—they are for everyone, and more power to their elbow. They are excellent institutions.
	We have heard horrendous stories of suicides, which have hit the papers, of people who have got into untenable debt and have seen no way out. I am struck, however, by the fact that in 70 per cent. of marriage breakdowns, financial problems are cited as one of the principal reasons. We should all be conscious of that. It is excellent that both Relate and community family trusts, which do excellent preventive work in terms of relationship support, are providing money advice to couples. Obviously, in all cases, prevention is better than cure.
	I was interested to hear that one of the Acts in the United States of America is called Truth in Lending, as that should sum up what the Consumer Credit Bill is about—honesty, transparency, people knowing what they are getting themselves into and not having nasty shocks and surprises, and the industry acting sensibly and responsibly at all times. Above all, that means people knowing the interest rates that they will pay before they take out a loan, how long they will pay the loan for, and having that data well in advance.
	Clearly, data sharing is important. Companies that lend need to know what other loans people have. It is ridiculous that at the moment, if people shop around a number of different credit lending companies to get the best value loan, and then they do not take up the offer, that can cause their credit rating to deteriorate, and they are regarded as a worse credit risk purely for acting sensibly and trying to shop around for the best possible loan. Penalising someone who has tried to act responsibly is completely the wrong result, and I hope that practice is stopped.
	It is imperative that the lending industry operates under the general proviso of really knowing its customers. That is what it is all about. I want clause 15 to bring about a situation in which, if a lender knowingly lends irresponsibly, that loan will not be enforceable in the courts. It is a little disappointing that we are uncertain about that at the moment. We will have to see how the courts pronounce on such cases, as it is an important principle. If we can establish that knowingly irresponsible lending will not be enforceable, that, probably above all else, will stop the lending industry acting in such a manner.
	There need to be clearer "wealth warnings" to people who are about to take out loans. For example, in relation to those advertisements that say, "Consolidate all your debts, roll them all up into one loan and you will be better off," a lot of people do not realise that they are moving from unsecured loans to secured loans, so their home could be in danger. There have been instances of people losing their home through not realising that, which is very regrettable and should not happen.
	Payment protection insurance is a scam and a racket. Under the terms in which it is provided by many credit lenders, it is extremely bad value for money, and can very often be provided considerably cheaper elsewhere. People who borrow should be able to cancel payment protection insurance separately, and it should not be a condition that it is wound up with their loan. People should be offered proper value for money.
	It is appalling that someone with a £10,000 loan should be twice as likely to have his or her credit limit increased automatically, as if the full amount owed were paid each month. The credit card companies like people who manage to make only the minimum repayments and they like people with large debts, because they know they will make more money out of those people. The industry will have to do something about the irresponsible increasing of credit limits.
	As I said earlier in an intervention, there should be much clearer warnings about credit card cheques, which attract an interest charge the moment they are received by the credit card companies. That is not made clear in the literature. It should be highlighted in large print in statements when they are sent out.
	I am sure we all agree that prevention is better than cure. Mention has been made today of proper financial education. I welcome the work done by citizens advice bureaux and schools, but I think that money education should be tied closely to significant life events that affect people's finances—losing one's job, for instance, or wanting to send one's child to university, which has become considerably more expensive under this Government. Other examples are a relationship break-up, the birth of a child and even a change of school, as was mentioned earlier.
	I think it would be best for financial information to be provided at the time of such major events in a clear, simple form. It could be provided in a number of places: clear, simple leaflets could be provided in surgeries, hospitals, jobcentres and libraries. I cannot envisage people queuing for a course on financial literacy on a wet Saturday afternoon, but I can envisage them picking up a small, sensible, easy-to-understand leaflet while they wait to see a doctor, at a jobcentre or at the local library. Such advice must be independent, so that our constituents can trust it.
	I realise that a number of others wish to speak, so I will end my speech.

Michael Weir: On behalf of the Scottish National party and Plaid Cymru, I broadly welcome the Bill and we will support it. We believe that the new definition of unfairness is a major step forward that will start to attack the problem of excessive credit charges. However, in an earlier intervention on the Minister, I expressed some concerns about whether it would attack the root of the problem—the fact that only a few cases ever came to court. I accept that under the new definition that may change, and I welcome dispute resolution, despite the fact that I used to earn my crust as a lawyer. In these particular circumstances, such resolution could prove very useful, but I still feel that many people who are suffering under such agreements will never come forward, whatever the test.
	Following the Meadows case I, with other Members, met representatives of the Office of Fair Trading to discuss the powers available to it. It appears that although the courts may find an agreement to be excessive, under the present law there are no powers to examine other agreements granted by a company. I appreciate that there is the matter of resources, and that this may be difficult, but will the Minister consider whether the intermediate sanction given to the OFT could include the power to order a company at least to alert other lenders to the judgment against it, and to investigate the terms of similar loans to establish whether they could be dealt with, without people having to go through the suffering of bringing a court case in the future?
	In the Meadows case, the loan was granted by a company different from the one that finally became the defendant in the action. The loan had been sold on, which is not unusual in the financial services world. What concerned me when I spoke to the OFT was that it appeared that even when a company's licence was suspended or revoked, there was nothing to prevent it from simply selling on the loan book to another company, with the loans continuing under the same terms and conditions. Although a company had been struck off for excessive charges or other actions, its loans were not subsequently checked. That is wrong. There should be some procedure for alerting people to that problem. If a company has granted one loan, it is likely to have granted many others in similar circumstances. Will the Minister consider granting the OFT that power?
	The most glaring omission from the Bill is the absence of any attempt to introduce rate capping, and it was interesting to hear some of the debate on that. We accept that debt incurred on the doorstep has been a pressing matter. Even if a power is not introduced at this stage, there is the possibility of introducing it through secondary legislation, should that be proved necessary by the review undertaken by the Department of Trade and Industry. We believe that it is necessary to tackle the problem.
	Enough has been said this afternoon about the extent of the debt problem, and I shall not rehearse that. Suffice it to say that Citizens Advice Scotland, in its "On the Cards" report, shows that there has been a 64 per cent. increase in the average debt since 2001, and it now stands at more than £13,000. I noted that the BBC said this morning that calls to consumer credit helpline had increased by 71 per cent. in the last year or so. That represents a tremendous increase in the amount of indebtedness in society, and shows just how deeply ingrained the problem is.
	According to Debt on our Doorstep, more than 3 million people on very low incomes have to borrow money at interest rates of between 150 and 200 per cent. We have heard examples today far above those rates. Even store cards from reputable stores charge interest rates of around 30 per cent.
	Much has been said about financial literacy, but one of the problems is that people do not understand APR, AER and many of the other acronyms presented to them. How many people read the detail of an agreement before signing it? Very few, I suspect. In the days when interest rates were rising sharply towards a 15 per cent. base rate, many lenders simply extended the terms of loans and sold them on the basis of the monthly repayment rather than the APR. Many of our fellow citizens did not understand that practice.
	A statutory cap is not a new idea, or indeed a particularly radical one. It existed in the UK before the 1974 Act and still exists in many European countries and in several US states. I appreciate that a cap does not appear in the Bill, but is under review. I strongly urge that the review be carried out swiftly. If the financial services industry does not get its act together as a result of the Bill the cap will be necessary, and should be introduced quickly. We only have to look at the never ending stream of credit offers coming through our letterboxes to see just how many companies want credit business, and I do not think that a cap would slow that down.
	The exact terms of clauses 12 and 13 do give us some concern. Clearly, we welcome the main thrust of the clauses and the provisions relating to default notices. Two points arise, however. The level of the default sum is not stated in the Bill, and it will be of little use if it is set too high. It has been suggested in lobbying that it could be £50, yet many of the default sums are currently set at between £20 and £25, so would not be covered by the clauses. Perhaps the Minister could share with us his thinking on the amount.
	The second problem is that there is no provision as to the frequency with which charges may be imposed under the ceiling. For example, if the ceiling were £50, a succession of smaller charges under that figure could be imposed without restraint. The consumer would not have the benefit of being able to pay off a loan without incurring interest charges.
	I am conscious of the time constraints in the debate so I shall end with one point on the issue raised by the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz) about time orders. I agree with him about the necessity to bring Scotland into line with the rest of the UK. From my previous experience I know that time orders can be very useful. In Scotland lay representation was originally allowed with such orders, but a problem arose because provision for that did not appear in the original legislation—the Debtors (Scotland) Act 1897. Following representations, it was decided that it breached the Scottish rules of court.
	A similar problem would arise from simply amending the Bill. The rules of court needed amending with regard to the representation on which Citizens Advice Scotland has lobbied. Under the present rules, anyone seeking a time order has to pay to have the order served on the defendant, but under the English system, they do not have to pay. Because of the rules of court in Scotland, the sheriff clerk cannot serve it on behalf of the applicant free of charge.
	My party and I believe that both those matters must be dealt with quickly. I am not convinced that that can be done merely through an amendment to the Bill; a Sewel motion may be necessary. However, I have spoken to my colleagues in Edinburgh, and as we are keen for the matter to be dealt with, we will co-operate in any way necessary to bring it forward, to ensure that people in Scotland who want to benefit from a time order can do so fully.

Martin O'Neill: Owing to the lateness of the hour, I shall not take up much of the House's time.
	I welcome the Bill and the introduction of the unfairness test rather than the use of the word "extortionate". The test is helpful and will be preferable to an interest rate ceiling. As we know, interest rates do not reflect the cost of loans; there are a number of other factors, so the provision offers a good initial way of looking at the matter. However, we need a failsafe to enable us speedily to improve the system by statutory instrument if the need arises. The matter need not take the proportions suggested by Conservative Front Benchers. I understand their points but, despite having the best of intentions, they are wrong on this issue. There should be provision for the introduction of a statutory instrument. The length of time that we have had to wait for the Bill means that we probably cannot afford to wait too long for changes that are more in the nature of fine tuning than fine principle.
	We should look carefully at the fines ceiling of £50,000, which is far too low. As several Members have pointed out, the type of businesses we are talking about are not hole-in-the-wall operations; for many of them, £50,000 would be nothing. It should be possible to adopt a more pragmatic form of words to enable us to alter the provisions if the case for doing so can be shown.
	Before Christmas, many of us were afraid that the Bill would not come before the House. The apparent sketchiness of some of its provisions may be attributable to the speed with which my hon. Friend the Minister was able to persuade others to get it into the pipeline. I imagine that there will be an incredible number of amendments in Committee to stiffen some provisions and to give others clearer definition. Draftspeople are probably working on them even as we speak.
	As the Chairman of a Select Committee, I am, sadly, normally excused from participating in Standing Committees—actually, I do not really want to. In 1983, a group of us were dealing with the Mental Health Bill and had been working on it for several months. It was the first such Bill since 1959 and in the run-up to the 1983 general election, we eventually got through a compromise. Almost 20 years later, another Mental Health Bill is being considered. I want to point out to my hon. Friend that legislation of that nature does not happen quickly, which is all the more reason for a pragmatic, open-ended approach to some of the provisions that several of us have identified as controversial.
	I am not normally relaxed about, or praising of, the Scottish nationalists, but the last statement in the speech of the hon. Member for Angus (Mr. Weir) was encouraging. It is important to deal with time orders as expeditiously and as felicitously as possible. If we can have agreement in both Edinburgh and London that that is necessary and desirable, with a good wind we can get those provisions through, too. That will greatly enhance for the whole United Kingdom what promises to be an extremely effective and encouraging piece of legislation. It will make the lives of many of our people much easier. Those people may be vulnerable, stupid, indolent—we could apply any number of adjectives—but, more than anything else, they look to Parliament for help and assistance. The Bill and my hon. Friend the Minister's encouraging remarks give us the chance to do something about that. I welcome the measure.

John Mann: I wish to ask my hon. Friend the Minister several questions, which I am sure he will answer at an early stage of the Bill's progress, if not today.
	It is salutary that during the two weeks in which the United Nations put together a record £2 billion for south-east Asia, World Bank profits over that period exceeded that amount. Does the Minister agree that, given that bank profits remain at record levels, if banks are not prepared to regulate themselves properly so that they are fair to consumers, it is appropriate for politicians to regulate them? However unwelcome such regulation might be in principle, it is being forced upon us.
	Over the past year, I have dealt with three cases that are relevant to the Bill. The Minister is aware of the Lewis case, which ended in tragic circumstances. It is a tribute to Mrs. Lewis that she has represented well the interests of all families who live with the consequences of debt. I also dealt with a family who were about to lose their house because of mortgage debts, and with a woman who had never worked, yet had £14,000 of debt, all of which was due to credit given by the big banks. Is it appropriate that it should be left to my negotiating skills—however good or bad—to resolve such problems? Should not a systematic approach be provided by the banks, or put in statute, to resolve them, rather than relying on people such as me—in essence, the voluntary sector?
	Should we not legislate to deal with the credit card cheques that the banks issue? The Co-operative Bank has specific links with the Labour movement, yet I recently received four credit cheques from it. Does the Minister agree that it is unethical for the so-called ethical Labour movement bank to issue credit cheques? Will he join me in calling on the Co-operative Bank to take a lead among all banks by refusing to issue such credit cheques to anyone in future?
	Does the Minister believe that the banks should use a debt-to-income ratio for credit applications, similar to that used for mortgage applications? Does he agree that in addition to annual credit statements from credit suppliers, people should receive a consolidated credit statement similar to that available to consumers in the United States? Does he share my regret that when the banks discussed a voluntary system of sharing information within the Association for Payment Clearing Services, one of this country's major banks was not prepared to agree with the others that credit requires self-regulation?

James Plaskitt: I welcome the Bill and the secondary legislation that the Government introduced towards the end of last year. Taking them as a package, I am pleased by the Department's response to the points that we on the Treasury Committee emphasised following our investigative work over the past couple of years, which was thoroughly covered in the speech made by my right hon. Friend the Member for Dumbarton (Mr. McFall), the Committee Chairman.
	During our investigation, we found a worryingly long list of the industry's failings. They fell into three categories, the first of which was failures of transparency. Illustrations of that included unreadable contract information—literally unreadable in some cases; too much misleading promotional material; and incalculable APRs. I am pleased that some of those issues have been picked up in the secondary legislation that has already been discussed elsewhere in Parliament.
	The second category involved questions about the industry's real competitiveness. One of the most glaring examples that we found was store cards. Virtually a cartel operates, and we are still looking at interest rates of about 30 per cent. In some cases, the rates have not been revisited or reduced since 1999. I am pleased that, partly as a result of the issues that the Select Committee teased out in the inquiry, the Competition Commission is looking at the store card industry. I hope that its review will have some consequences for how the industry conducts itself.
	The third category involves unfair trading practices. I come back to the unsolicited issuing of credit card cheques. There is one glaring omission in the Bill: it contains nothing that will help us deal with those cheques, which are sent to 16 per cent. of UK households. Virtually every issue is unsolicited, and evidence shows that they are sent to a greater than average proportion of cardholders who are already experiencing some form of financial difficulties. The Treasury Committee concluded from our investigations that in many instances the cheques are sent out irresponsibly by some lenders.
	Last year's Government White Paper appeared to agree with us. At paragraph 5.62, it cites as an example of irresponsible lending
	"unsolicited issuing of cheques that can be used to draw on credit card accounts".
	I hoped that, as that example was flagged up in the White Paper, we would see some follow-through in the Bill. I hope that there will be time in Committee to consider amendments to cover that.
	Credit card cheques are simply not necessary. They did not exist a few years ago and they are a wretched development in the expansion of consumer credit. Unlike credit cards, they offer no interest-free period. Interest starts as soon as the cheque is used. The rate of interest can be double that for the credit card to which they are nominally attached. There is a handling fee of 2 per cent., which does not apply to the credit card. There is less consumer protection for the transaction than if it had been made by credit card. Such transactions are far less secure against fraud than those made by credit card, yet in virtually all cases in which they are used, the consumer could have made the purchase using the credit card itself.
	We have to ask what the real purpose of credit card cheques is and why the industry continues to promote them. The Treasury Committee asked for a number of measures to deal with them. We asked for clearer information on terms and conditions, statements on the cheques about applicable APRs and notice that interest was payable immediately. We asked that companies make it clear to users that they have less protection if they use credit card cheques than they have under any other aspect of consumer protection legislation and that credit checking be carried out before they are issued.
	I take the view that the existence of credit card cheques is indefensible. I accept that it may be difficult to go straight to banning the practice. When we had the chief executives before us on the Select Committee, I asked them to justify the unsolicited issuing of credit card cheques and I found that they could not. Although their explanations were possible defences for the existence of credit card cheques, none of them had a defence for the unsolicited issuing of them. The truth is that they are a purely cynical, opportunistic marketing opportunity—an enticement to users to use up their credit limit. One has only to look at the glossy promotional material that comes with the cheques to find confirmation of that. The literature says, "Use this for a gift, for a treat, for a holiday, to pay the school fees, to pay a utility bill or even the council tax bill." To suggest to consumers that they should undertake expenditure of that nature using the most expensive form of credit available is irresponsible.
	It seems to me that the industry hopes that the cheques will flop on to the doormat on the same day as a glossy holiday brochure—that the consumer will put two and two together and end up paying six for it. I am not convinced that there is a case for those cheques, and they should certainly not be sent unsolicited. They are not part of the fair relationship that the Bill seeks to achieve. They do not help to achieve affordability, because they are the most expensive form of credit. They are not responsible lending. The industry says that when it introduces its revised code in March it will deal with some of these matters and offer consumers the right to opt out, but that does not come close to achieving what needs to be done. We must go much further, and we should require an opt-in. Cheques should be issued to consumers only if they actively request them.
	The Bill provides an opportunity to end the unsolicited issuing of such cheques. It is a good Bill, but it is incomplete. If we could add such a provision, it would be much better.

Laurence Robertson: It is a pleasure to wind up the debate for the official Opposition. It has been a good natured and well informed debate, and I shall deal in a moment with some of the contributions.
	I, too, regret the absence of the Secretary of State, but I pay tribute to the Minister for the way he has put his case and drawn up the Bill. I thank him for his courtesy in inviting me to his office a few weeks ago to discuss the Bill. Perhaps I am not supposed to say that. I am sorry, but I appreciated the invitation. That does not mean that we will agree on everything, but when we do not oppose the Bill, working behind the scenes like that is beneficial to those whom we are trying to help.
	We heard from all parts of the House about indebtedness. We heard that debt has increased considerably in the past few years. We also heard that incomes and household assets have increased—that is true, but it misses the point. In individual cases there can still be a problem, and in some cases a desperate problem. To say that income or assets have increased in general is to ignore the deeper point. I am pleased that the deeper point has not been ignored by many hon. Members who spoke today. They recognised that debt can be a huge problem.
	I remember my grandfather telling me, "If you're in debt, you're in danger." That is true and it is a maxim that I have tried to stick to all my life. There are times when it may be desirable to borrow money. If one wants luxury items, that may be the right way to acquire them, although personally I think it is not. It may be useful to borrow money or extend one's credit to get over difficult times. The problem is that when one is in difficulty, one is more vulnerable, and when one is vulnerable, one is less likely to strike a good deal. We should be aware of that.
	Some people do borrow sensibly, but when I nipped out earlier for five minutes for a cup of tea, I had a message on my pager. Somebody who came to see me yesterday—a constituency case—needed a little money. The message was to let me know that they had gone into their bank today without much supporting evidence and had come out with a promise of £24,000, just like that. That, I regret to say, is not untypical. It happens all the time and it proves to be a difficulty for some people. I know from experience that when people go out to work on Monday morning and get their pay packet on Friday or at the end of the month, it is depressing to see a large chunk of that money go to pay off past debts, perhaps for consumer goods from which the shine, the polish and the attraction have worn off. We are right to tackle the issue.
	One of the problems is that legislation cannot tackle all the issues. We live in a free country where, rightly, people can borrow money if they so desire. Nothing that I have said so far should be taken as an attack on the credit industry, which is extremely efficient and one of our leading industries. There is a case for better education on running finances and the composition of credit agreements. From studies that I have conducted, for example, I know that if a contract includes a big condition in large print, minute writing somewhere else on the contract might not be legal and might not reverse what the big writing says. I know that, but a lot of people probably do not, and they may fall foul of such contracts. That is one small example of how we might start to educate people better. When we are broadening the curriculum in schools, such matters could be added to citizenship classes. Whenever I go to a wedding or speak to couples who are about to get married—they do not come and seek my advice—my advice to them is the same as that given to me: do not overstretch yourselves and do not get into too much debt.
	I shall move on to hon. Members' contributions. The right hon. Member for Dumbarton (Mr. McFall), the Chairman of the Treasury Committee, discussed loan sharks and interest calculations and warned about debt.
	The Liberal Democrat spokesman, the hon. Member for Gordon (Malcolm Bruce), spoke at great length about many issues—I shall not try to touch on all of them, but his speech was comprehensive.
	The hon. Member for Burnley (Mr. Pike) spoke about people being "ripped off" by loan sharks and cited one or two moving cases.
	My hon. Friend the Member for Upminster (Angela Watkinson) made a characteristically good, old-fashioned speech containing many good old-fashioned values—that is a compliment. She also provided warnings about debt, and I echo her remarks.
	The right hon. Member for Leeds, West (Mr. Battle) discussed interest rate charges. I have not been persuaded yet and want to return to this point, but his argument for a statutory instrument to allow the Minister, whoever they may be—an election may well be coming up—to impose a ceiling on interest rates was persuasive. [Interruption.] I might be that Minister. Labour Members seemed to give up on the Minister and started to ask Conservative Members questions about what we would do, which is sensible because they will be doing that an awful lot more after 6 May.
	My hon. Friend the Member for Bexhill and Battle (Gregory Barker) discussed the savings ratio and increased household debt. He provoked a number of interventions, but he made a thoughtful speech, especially when he said that he wants a "more favourable balance" in the industry, which is a good way to put it.
	The hon. and learned Member for Dudley, North (Ross Cranston) made a good point, to which I shall return, when he asked about the meaning of "unfair".
	My hon. Friend the Member for South-West Bedfordshire (Andrew Selous) made an outstanding speech, especially when he mentioned that financial problems are a considerable factor in many marriage breakdowns. Although financial problems are not the only reason for marriage breakdowns, debts place many marriages under an unreasonable strain, and I am glad that he raised that point. He raised another important issue, the inadequacy of credit ratings, and discussed payment protection, which he described as "a scam".
	Unfortunately, I missed the speech by the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz), but I am told that he raised the issue of unfairness. I apologise for missing his speech, and that of the hon. Member for Angus (Mr. Weir), who made the good point that APRs are not a reliable guide to actual interest rates.
	In the shortest speech that I have ever heard him make, the hon. Member for Ochil (Mr. O'Neill) made the good point that statutory instruments are perhaps needed.
	The hon. Member for Bassetlaw (John Mann) discussed banks and their practices; the hon. Member for Warwick and Leamington (Mr. Plaskitt) spoke about credit card checks; and the hon. Member for Caerphilly (Mr. David), from whom we have just heard, discussed the difficulties with many money lenders. It has been a very wide-ranging debate.
	I mentioned my concerns about debt levels, education and small print. Like many other hon. Members, I am also somewhat concerned about the way in which opportunities to borrow money are marketed and sold.
	It is right to reduce the burden of proof to unfairness, but we need to know what that means; otherwise, one or two court judgments might be required in order to set a precedent. I am not convinced that we should leave the provision as it is, and before the Committee starts I shall discuss with my hon. Friends whether we want to try to clarify it. After all, clarification is one of the Government's main motivations for introducing the Bill.
	On small loans, one of the arguments against interest rate ceilings is that the interest rate is not necessarily the all-important factor. Many people find small loans of £100 or £200 very helpful. The interest rate on those loans might be relatively high, but the companies who lend that kind of money are often more flexible in their approach, so one factor may balance the other. We will need to take a sensitive approach to that in Committee. I would not want such customers to be alarmed, for example, by getting late payment notices when they are only two or three weeks late with the payment and paying only a fiver a week.
	I am worried about giving more power to the Office of Fair Trading. The Bill is all about proper regulation and cutting out the loan sharks—that is necessary, and I would not want anyone to get me wrong about that. However, I remember that when I had an Adjournment debate on the horseracing industry in the House about 18 months ago—it was replied to by the Minister who will reply today—I said that although Parliament can control the OFT through primary legislation, it has no such control on a day-to-day basis. I could bring my case to the House of Commons, but it would not be heard by the OFT, which had the power to destroy the horseracing industry, yet there was nothing that I, as a Member of Parliament with the Cheltenham racecourse in my area, could do about it. That is an analogy, but it is relevant. I am particularly worried, for example, about giving the OFT the power to enter premises. I shall return to that in Committee.
	Several hon. Members said that there should be more scope for statutory instruments in the Bill—for example, to allow the Minister, if he so wishes, to set interest rate ceilings or to increase the £50,000 fine if it is found to be inadequate. At the moment, I am not persuaded that we should go down that route, although I understand the points that have been made. Again, I will discuss it with my hon. Friends.
	We will need to analyse many of these matters in Committee, and I regret that we may not have adequate time to do so. I am afraid that it is the hallmark of this Government to programme everything. That is why, in a few minutes, we will vote against the programme motion, although we will not vote against the Bill itself.
	We recognise the need for the Bill. The credit industry and the financial world in general have changed remarkably and are unrecognisable from what they were 30 years ago. We need to root out loan sharks and to create more favourable conditions for those who borrow money, especially the vulnerable. The same people lose out all the time, and the Bill is welcome if it will prevent those same people losing out in future. I thank the Minister for his courtesy in keeping me informed as he introduced the Bill, and I look forward to taking up the issues with him in Committee.

Gerry Sutcliffe: With the leave of the House, I should like to respond to an excellent debate on a serious issue, which affects many of our constituents and an industry that contributes well to our economy.
	In my opening remarks, I said that the Bill's fundamental principles were transparency, responsibility, protection and fairness. I believe that it will deliver that. Front-Bench spokesmen from the Opposition parties made excellent contributions this afternoon. I am pleased that my hon. Friend the Member for Ochil (Mr. O'Neill), who chairs the Select Committee on Trade and Industry and my right hon. Friend the Member for Dumbarton (Mr. McFall), who chairs the Treasury Committee, are present. I want to put on record my thanks to them and the members of their Committees for their excellent work in deliberating on credit and other financial inclusion issues.
	Many hon. Members made tremendous contributions because it has been one of those rare occasions in the House when a Bill gets the general support of all parties. Of course, there are matters of detail to discuss and the Committee and Report stages will be eventful. I am grateful for the expertise that hon. Members' contributions have shown. Indeed, we heard that my hon. and learned Friend the Member for Dudley, North (Ross Cranston) has published a textbook on many of the problems that we discussed. Excellent speeches were made and competition for places on the Committee will be strong because many hon. Members want to ensure that Bill meets the objectives that we are trying to achieve.
	The debate generally showed consensus. The hon. Member for Eddisbury (Mr. O'Brien), supported by the hon. Member for Bexhill and Battle (Gregory Barker), introduced a little of the political agenda and I want to set the record straight. I shall set out the strong economic position that the Government have achieved—hon. Members would expect nothing less of me. We have the lowest unemployment for 29 years, the longest period of sustained economic growth for 200 years, the lowest mortgage rates for 40 years and the lowest inflation since the 1960s. That is a good record from which to examine many of the issues that we have discussed today.
	Some, albeit not many, Opposition Members tried to insinuate the idea that credit was bad for people. On the whole, credit, when used sensibly, is a useful tool for many people. As the hon. Member for Upminster (Angela Watkinson) said, attitudes have changed greatly. The industry has expanded from only one credit card in 1974 to the 1,500 products and 39 million credit cards that now exist. In the UK economy, there has been a 50 per cent. increase in total net household wealth. We have experienced average growth of 3.1 per cent. in real household disposable income since 1997. More important, 2 million more people are in work. That makes a great difference. I chide the Conservative party a little for presiding over interest rates of 15 per cent. and 3 million unemployed.
	I am confident that the macroeconomic position that the Government have created gives people the ability to make decisions about their economic choices. Credit can be a useful tool for that. However, there are important issues such as savings. As I said earlier, the key matter for me is the proportion of household disposable income that is spent on interest payments, which were 7.6 per cent. for the first quarter in 2004. That is a good indicator.
	I was asked several questions in the debate and I shall try to answer as many of them as possible and as quickly as possible in the time that remains. If I cannot answer them all in the time, I shall write to hon. Members. We shall go through the Bill's many clauses in great detail in Committee. I shall not suffer from lack of advice, given the many issues that were raised in the debate.
	One of the key issues raised was the use of secondary legislation in relation to the interest rate ceiling, and I want to clarify our position on that. The hon. Member for Eddisbury is quite right; I did say on the radio that we could introduce secondary legislation on the interest rate ceiling. On reflection, however, I see that that would not be the right way to do it. We will review the position, and I know that hon. Members will raise the issue in Committee. Given the evidence in the report that we commissioned, and the consultation documents that we received from a variety of bodies, we are not convinced that an interest rate ceiling would be adequate to cover the problems involved. The unfair credit test will affect extortionate credit. The reason for not going down the secondary legislation route is that we have consulted fully on this Bill all the way through. It would therefore be wrong to use secondary legislation as a vehicle, without going through further full consultation. I hear what my hon. Friends have said about interest rate ceilings, and I look forward to our debates in Committee, when we shall be able to put on record the various reasons why we do not favour that particular route.
	Another key element of the debate involved credit card cheques. My hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt), a key member of the Treasury Committee, has raised this issue on a number of occasions. He pointed out that one of our own documents talked about the inappropriateness of such cheques. I favour the change to the banking code of practice as a means of dealing with this, but we shall need to monitor the issue and, if that is unsuccessful, we shall have to return to it and see what we can do. If the cheques are being sent to vulnerable or inappropriate people, that could be caught up by the unfairness test. Perhaps we need to look at that.
	Many hon. Members talked about the role of credit unions. The Government believe that credit unions have an important role to play in the provision of greater choice and diversity in the financial services sector. We have been involved in a number of initiatives to help the movement to grow and to offer a greater range of services to its members. Credit unions certainly have a key role to play.
	Many hon. Members also supported the work of the citizens advice bureaux and the other organisations that give help and support to people who have difficulty with debt. We are working closely with Citizens Advice to inform it of the changes, so as to give it time to revise its information and training. It has estimated that the initial cost to Citizens Advice of the introduction of the Consumer Credit Bill will be in the region of £1 million, so we are going to have to look at the resource implications of that. I noticed that the hon. Member for Eddisbury did not make a commitment to fund the citizens advice service in the way that we do, through the DTI, should that awful day ever arrive when his party is again in Government.
	Debt advice is important, and the credit industry is looking at the issue. We are working on many ways of targeting the best kind of advice, particularly in regard to vulnerable consumers. We are helping to develop a gateway to telephone advice services that will signpost consumers to the service appropriate to their needs. We are also working to ensure sustainable funding for the free debt advice sector, and encouraging increased contributions for three-year periods.
	There has been a great deal of discussion on the £50,000 penalty limit, and we can usefully discuss in Committee how we arrived at that figure. We can also consider the way in which we want the penalty to be imposed for breaches of requirements, and not for extortionate or unfair credit. The penalty cap is not unprecedented. There is provision for such a cap in the Competition Act 1998. It will be useful for us to have a debate in Committee on that subject, and on the licensing regime. We considered the introduction of a provision relating to 10 per cent. of turnover, a provision that is also in the Competition Act, but we decided that it might be inappropriate. Hon. Members from Scotland raised the question of time orders. I am keen to ensure that they will be a useful vehicle, and we need to take up the offers that have been made, to ensure that there is consistency throughout the UK.
	This is an important Bill, and we will look at it in great detail in Committee. It is long overdue—it has taken 30 years to introduce it—and we need to ensure that it gets on to the statute book as soon as possible. I commend the Bill to the House.
	Question put and agreed to.
	Bill accordingly read a Second time.

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(6),
	That the following provisions shall apply to the Consumer Credit Bill:
	Committal
	1.   The Bill shall be committed to a Standing Committee.
	Proceedings in Standing Committee
	2.   Proceedings in the Standing Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 3rd February 2005.
	3.   The Standing Committee shall have leave to sit twice on the first day on which it meets.
	Consideration and Third Reading
	4.   Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
	5.   Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
	Programming Committee
	6.   Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.
	Programming of proceedings
	7.   Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.— [Jim Fitzpatrick.]
	The House divided: Ayes 273, Noes 83.

Queen's recommendation having been signified—
	Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a) (Money resolutions and ways and means resolutions in connection with Bills),
	That, for the purposes of any Act resulting from the Consumer Credit Bill, it is expedient to authorise the payment out of money provided by Parliament of—
	(1) any expenditure incurred by a Minister of the Crown or the Office of Fair Trading by virtue of the Act, and
	(2) any increase attributable to the Act in the sums payable out of money so provided by virtue of any other Act.—[Mr. Watson.]
	Question agreed to.

David Wright: I appreciate the opportunity to discuss rail services in Telford. The quality of those services is an issue that local constituents and the business community regularly raise with me and with my hon. Friend the Member for The Wrekin (Peter Bradley). It will be useful if I begin by describing the services currently enjoyed by Telford people; I will then outline a set of priorities for future action, which I hope the Government will take up. They fall under two main headings: improving local services, and through services to London.
	It is worth pointing out that rail travel is popular, and that people in Telford and throughout the country are keen to use a good service. Indeed, "Transport Trends: 2004", published by the Department for Transport, shows that
	"since 1980, the number of journeys made by national rail has gone up by 33 per cent., from 760 million to 1,014 million. It fluctuated, roughly in line with the economic cycle during the 1980s and early 1990s, but has risen sharply since 1995–96. The number has risen by 4 per cent. in the last year. Passenger kilometres travelled by national rail have increased by 35 per cent. since 1980, from 30 to 41 billion passenger kilometres. Again, most of the increase has occurred since 1995–96. The effects of the Hatfield crash in October 2000 briefly caused an interruption in this trend, but usage has increased since then."
	It is a positive trend in terms of passenger usage.
	Thus, contrary to popular belief, more people are using the railways. One needs to reflect only on the number of vehicles parked by commuters at Telford Central railway station today or on any other day, in comparison with 10 years ago, to know that the trend is mirrored by my constituents and those of my hon. Friend the Member for The Wrekin. That does not mean that the service is problem-free. The railways are suffering from historic under-investment, stretching back for decades, and from the flawed structure that was put in place during the privatisation. The process of reform has already begun and there is now record investment in the industry.
	It may be helpful if I spoke a little about the services that run to and from Telford. Telford sits on a line running from Wolverhampton through Shrewsbury and on to north Wales. The line has not been electrified, which has caused a number of problems that I shall return to later. There are two stations in my constituency: Telford Central and Oakengates. Oakengates is a small halt-style station of which I am very fond. It is important to the local community and I am fond of it because I commuted from it into the conurbation for many years. The main passenger usage is at Telford Central and at Wellington, which is in Telford, but falls within the constituency of my hon. Friend the Member for The Wrekin.
	Three operators use the route: Central Trains, Arriva Trains Wales and English, Welsh and Scottish, which runs freight services. Central Trains operates two services an hour—an all-stations DMU two-car class 156 that runs from Wellington to Walsall and a faster DMU class 158/170 service that stops at Wellington and central Telford only and runs from Shrewsbury to Birmingham, New Street. Additional services run during peak hours.
	Arriva Trains Wales operates one train an hour—a class 158/175 service that alternates from Aberystwyth in one hour and Chester to north Wales in the other hour, stopping at Wellington and Telford Central. English, Welsh and Scottish Trains run coal MGRs—automatic bulk-coal vehicles—into Ironbridge power station along the line, and these run approximately two-hourly on weekdays. A steel train from south Wales to Wolverhampton steel terminal also runs on most days. Telford used to have a direct service to London, Euston, with a changeover from diesel to electric at Wolverhampton and vice-versa on the return journey. The service was finally discontinued in 2001, after being scaled back to one service per day previously.
	Now that I have set the scene, I shall move on to my first point about improving local services for Telford residents. The Secretary of State announced last year that the number of passenger rail franchises is to be reduced from 25 to 19 and the industry has made it clear that it is committed to ensuring that those new arrangements drive more effective working between Network Rail and the train companies in the interests of passengers. When the Central Trains franchise expires, its services will be absorbed, as appropriate, by Virgin Cross Country, Midland Mainline, Northern, Silverlink Trains and Chiltern Railways franchises. That will obviously impact on Telford and will provide us with an opportunity to look at the scope and style of the services that my constituents—and, indeed, those of my hon. Friend the Member for The Wrekin—enjoy.
	In the light of that debate, will the Minister insist that the service is positively reviewed at the time of the transfer to the new franchise companies? The review will focus on four key areas. First, it will focus on more punctual services and fewer cancellations; and secondly, greater capacity in local services so that passengers do not have to endure the current problem of overcrowding—an issue that also needs to be addressed on the Arriva service. Thirdly, it will focus on providing more regular services from Telford to Birmingham, International, which is where the major regional airport is located. Fourthly, it will need to examine the potential for a service from Telford that stops at local stations—such as Tipton and Smethwick, to cite just two examples—in the west midlands conurbation through to Birmingham, New Street.

David Wright: I agree wholeheartedly with my hon. Friend. That is the situation at Telford Central, Oakengates and Wellington. One can arrive late at night, on a local service, and the station is deserted. In the case of Telford Central, people have to walk a long way to reach areas where there are other people, because it is right in the centre of the town and surrounded by offices and hotels. However, I shall return shortly to some of the improvements that have taken place at Telford Central that have made the situation much better than it was 10 or 20 years ago.
	Those issues—including the fifth one raised by my hon. Friend—are important because Telford is a housing growth point with thousands of new homes to be built in the next 10 years. Many people will probably move to the town from the black country and other urban areas, retaining their jobs in the short term. Easier rail connections will obviously help encourage more people to move into the area.
	We are a growing town which promotes itself for new business start-ups. We also have a large number of longstanding companies. Both of those groups want better rail services. Business and leisure tourism are fast growing and important sectors in Telford, supporting thousands of jobs and generating income in terms of visitor spend. The town is fortunate in having one of the UK's top 10 conference and exhibition venues in the International centre, as well as several large hotels.
	Improvements in services would be relatively easy to achieve. People want to be able to plan their time effectively and turn up at the rail stations at a time that they understand in the timetable, whether it be 10 to or 20 past the hour. They want to know that the train will arrive on time, it will be clean and a seat will be available. That is not too much to ask—indeed, much of the time it already happens—but there are problems, especially at peak times. Those criteria must be met every time a train stops at Wellington, Oakengates or Telford Central.
	There have of course been some very positive improvements in recent years. The quality of the trains provided by Virgin to London from Wolverhampton, which are used by Telford residents, has improved significantly. The new platform at Wolverhampton has also improved capacity at that station, which is the main connection point for Telford rail users. I also used to commute on the line some 20 years ago when I was a student—I do not like to think that it was so long ago—and the reliability of the service then was awful. So we have clearly come a long way. The service has improved, but we could do so much better.
	There is also now much better integration of transport services at Telford Central station. It was only in the last couple of years that the station was linked to local bus services and this has proved very popular. We have recently had the car park resurfaced, new spaces have been provided—we now have more than 300—and there is a new taxi rank. That all costs money and is often overlooked. Local residents also often overlook the fact that we are investing in the station. However, we could do a lot more, as my hon. Friend points out. We also have a major proposal for a rail freight terminal in the town and I hope that that will move towards completion in the near future.
	My second point relates to the resumption of direct services from Telford to London. Direct services from Shrewsbury to London, and from Telford to London, have been tried before but they proved to be uneconomic. The Shropshire chamber of commerce and Business Link have developed a business case for the resumption of services and I know that it was submitted to the Department for Transport last month. Through services were first introduced when the west coast main line was electrified in the 1970s, but the need to change from electric to diesel locomotive at Wolverhampton, in order to connect to Telford and Shrewsbury, was time-consuming, disruptive and expensive. The need to change traction at Wolverhampton not only caused congestion at that busy mainline bottleneck but often allowed the following Central Trains service to overtake it, which was illogical.
	The chamber of commerce proposes a scheme to place the large conurbations of Shrewsbury and Telford on the west coast main line by electrifying the 28 miles from Oxley to Shrewsbury and revitalising the rail services on offer to London and to Birmingham and its international airport. That would be of direct benefit to Telford residents. The detail of the submission draws on the social and economic factors used in the Strategic Rail Authority's appraisal criteria, and a new timetable for services has been proposed.
	A large number of people travel to Stafford from Telford by car to use the more rapid rail service to London. People using the London link from Wolverhampton often experience long waits on the platform, either going down to London or returning, especially in the evening. I know all about that—as does my hon. Friend the Member for The Wrekin. I have often stood in the cold on Thursday nights waiting for the connection to Telford.
	Electrification of the line from Wolverhampton is a major financial commitment, but the Shropshire chamber of commerce has made the case that it will ultimately prove value for money. We must consider that option and we must also look into the possibility of improving diesel services to give through running to London. The chamber has considered that option and we may have to return to it if electrification costs prove prohibitive.
	I am not a rail finance expert so I cannot comment on the detailed costings in the submission, but I hope that my hon. Friend the Minister will look at them in great detail and that she will meet members of the chamber and Business Link, my hon. Friend the Member for The Wrekin and me to talk through the scope of the service. A growth point such as Telford deserves a connection to London.

David Wright: I am more than happy to accept my hon. Friend's comments. I hope that we can come up with a scheme that will benefit all our communities in Telford. If it is not possible to reinstate a direct London service, we need to push hard for better, faster services to Birmingham International, which is a key regional transport node. We need to ensure that those services come online, even if the London service does not come back into use soon.
	I look forward to the comments of my hon. Friend the Minister on my two key points and on some of the other points that we have discussed. I fully acknowledge that we have seen major strides forward in the rail service in recent years; the Government are making tremendous investment in it. The new structures will allow us to prioritise the needs of passengers, as expressed to Members of Parliament and, more generally, to rail-user groups in the community. Those structures enable us to listen more effectively, and I hope that the Government will listen tonight, especially to the points about local services.
	We are certainly making progress and it would be put risk if other parties were to get into power, as cuts in the transport budget seem to be one of the main objectives in the Opposition's cuts agenda. I look forward to the Minister's response.

Charlotte Atkins: I certainly accept what my hon. Friend says. It is clear that Telford and the Wrekin are growing apace, so we must take that on board when we consider options for transport links.
	Capacity enhancements and possible infrastructure improvements that may be needed to accommodate both rail freight and passenger traffic, and to meet the long-term planning needs of the network, will be determined by a series of regional planning assessments that will form the basis for planning the development of the railway over the next five to 20 years. RPAs will consider the function of the railway within current and future land use and transport systems and its role in supporting the economic and wider development objectives of local, regional, devolved and central Government. One of the RPAs' key objectives will be to maximise value for money in pursuit of the Government's objectives for the environment, safety, economy, accessibility and integration.
	Concern has been expressed that passengers and intending passengers do not find it easy to obtain information on train services and fares. We are anxious that all rail passengers and intended passengers should be able to obtain rail information easily. The published timetables and those displayed at Telford railway station give information about direct services from Telford to stations in East Anglia, Pembrokeshire and Cornwall. Services to Manchester airport, Birmingham airport and London Euston are non-direct services. I am sure that hon. Members will appreciate that, as non-direct services can involve a number of changes along the route, this information is better provided by the station ticket office staff. The national rail enquiry service is extensively used for the provision of rail information and has a good reputation for both speed and accuracy. Increasingly, rail inquiries are being handled via various websites, and this appears to be both fast and effective, too.
	As the House will be aware, the Strategic Rail Authority published its community rail development strategy in November. The strategy aims to put local and rural railways on a sustainable basis for the long term, by increasing ridership, freight use and net revenue, managing costs down, and through the greater involvement of the local community. It is based on the premise that the closure of lines is neither desirable nor a solution to the problems that local lines face. I can assure hon. Members that this strategy is firmly aimed at increasing rail use and developing the railway, to the benefit of the communities that they serve.
	The strategy has been developed over a period of some 18 months, involving an extensive consultation exercise in February last year, which drew responses from over 300 organisations and individuals, including local and regional authorities, regional assemblies, regional development agencies, the rail industry, tourism bodies, MPs, rail user groups and a host of other bodies and individuals. By and large, the objectives and approach advocated in the consultation document were supported by the respondents. There was an almost universal agreement that no single approach could be adopted network-wide. Rather, the appropriate local solutions would have to be encouraged within a broad framework.
	The final strategy was published in the light of the responses received to the consultation. It lists 56 routes that the Strategic Rail Authority proposes to designate as community rail lines. These local and rural routes make up about 10.5 per cent. of the national rail network, including 390 stations. As hon. Members will know, personal mobility is increasing, traffic congestion is rising and growth is taking place in many areas served by community railways. There is evidence of latent demand for these lines. The argument for their retention and development is therefore compelling, and is fully supported by the Government. To achieve the objectives of the strategy there will have to be active support from a wide range of stakeholders, including train operators, Network Rail, local authorities and local users, working in partnership.
	The Heart of Wales line from Shrewsbury to Swansea is an example, as is the Shrewsbury to Chester section of the Birmingham to Chester services that pass through Telford. The aims are to develop new markets, to fill empty seats on current services, to integrate the rail service with local bus and community transport services, to build up relationships with small businesses along the line, and to evaluate the potential for new stations and higher service frequencies.
	Telford, as well being a major destination in itself, is an important interchange point between a number of train services and buses to non-rail destinations. The future of rail services from Telford is secure, and the SRA will be working to improve the performance and quality of services to and from the town. I congratulate my hon. Friend the Member for Telford on initiating the debate, and I hope to work with him and my hon. Friend the Member for the Wrekin in future.
	Question put and agreed to.
	Adjourned accordingly at twenty-one minutes to Seven o'clock.